Covid 19: Nigeria May Slip Into Recession Again

By Uche Mbah

With man-hours being lost during quarantine in parts of the country and the oil price crashing to unprecedented low, fears are that Nigeria will slip again into recession after the crisis period has past.

Nigeria had predicated their budget benchmark on $57 per barrel. As at then, crude price was hovering around $72 per barrel. But Oil price has since plummeted to $18 per barrel before marginally rising again to $22 per barrel.

Production cost was put at about $28 per barrel.

Besides, reports indicate that barges of Nigerian Crude are hovering at the high seas looking for non-existent buyers.

Analysts believe that all these, coupled with the debt profile of the Country, may finally drive the country into recession again.

Presidency has imposed quarantine on Abuja, Lagos and Ogun states. most southern states are on quarantine, but most Northern states are not.

Lagos and Abuja are the economic hub of the country.

Already, Nigeria has reduced its operating budget due to the crash in oil prices.

Although the Central Bank Governor, Godwin Emefiele, has assured that there is not going to be devaluation, the Naira has fallen slightly to about N400 to the dollar.

With the onset of covid-19, devaluation and recession appear to be inevitable.