(Ecofin Agency) – Due to the drop in the price of oil and the slowdown in the economy due to Covid-19, Nigeria has entered a recession. Its GDP contracted for the second consecutive quarter, according to official data. The country is therefore suffering its second recession in 4 years.
According to data released by the Bureau of Statistics on Saturday, in the third quarter of 2020 Nigeria’s GDP contracted by 3.62 percent. A second decline as the country’s economic activity fell by 6% in the previous quarter.
The Bureau of Statistics attributed this recession to falling oil prices. The contribution of oil to GDP contracted in the third quarter by 13.89% against a drop of 6.63% in the second quarter of 2020. In addition, the average oil production, usually 2 million barrels per day, is now reduced to 1.4 million barrels.
Along with the oil crisis, the Nigerian economy has also suffered a slowdown due to the Covid-19 crisis. At the start of the second quarter, the government imposed measures such as restricting movement between states, closing schools and businesses. Measures that paralyzed the economy leading to a decline in non-oil activity of 6.05% during this quarter. A decline which continued to stand at 2.51% in the third quarter.
This recession had been predicted by the Nigerian central bank which estimates that the country will record a recession of 8.9% in 2020. However, in the first quarter of 2021 at the latest, the institution expects a resumption of growth.
Note that Nigeria, Africa’s leading economic power, experienced its last recession in 2016, but rebounded the following year.
Vanessa Ngono Atangana