Nigeria’s floundering economy at crossroads, needs urgent attention

Nigeria may dive deeper into an economic crisis if government does not take urgent, deliberate steps to rescue it from a looming collapse.

This is because most of the country’s macroeconomic outcomes do not look good as confirmed by the Presidential Economic Advisory Council (PEAC) during their recent meeting with President Buhari.

At that meeting – the 6th since inauguration – PEAC advised the president on a myriad of issues, including worsening security environment and impact on food prices, poverty, unemployment, vulnerability, among others. The Council also emphasised the sluggish oil sector reforms, especially on the need to pass the Petroleum Industry Bill (PIB), which has dragged since 2008.

Africa’s largest economy exited recession in Q4 2020, albeit with very slim growth of 0.1%. The return to growth was driven by improvement in some non-oil sectors – including agriculture, solid minerals, ICT and Agric sector – as well as continued growth in the technology sector, rather than broad-based growth. But the domestic economy remains fragile with rising inflation, unemployment remains high and external account weak.

Rising prices of goods and services continues to be a worry, mainly driven by disruption to farming activities and inter-state trade as a result of worsening security conditions. In addition, the effect of depreciation in the exchange rate and the residual impact of border closure contributed to higher prices.