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MAN: NBS’ report to reflect recession in Q2 ’20

Downturn blamed on four-month lockdown

Following the four-month coronavirus outbreak-induced lockdown, the Manufacturers Association of Nigeria (MAN) has disclosed that the country’s economy will show some contraction in the second quarter of this year when the National Bureau of Statistics (NBS) releases the Gross Domestic Product (GDP) report for the quarter.
Acting Director-General of MAN, Ambrose Oruche, in an interview with New Telegraph in Lagos, explained that the pandemic was a global crisis and that it won’t be only Nigeria that will be experiencing contraction in her economy as both developed and developing economies of the world are bound to go into recession too.
He attributed Nigeria’s recession to the fact that even before the outbreak of the scourge globally, the country’s economy was already in serious crisis, adding that the pandemic only came to worsen the situation.
Indeed, MAN’s position is coming on the heels of the Minister of Finance, Budget and National Planning, Zainab Ahmed’s statement that the coronavirus outbreak was expected to further slow the country’s fragile GDP growth with manufacturing sector and other key sectors of the economy expected to witness fragility in performance growth amid disruption in trade (demand and supply chains), particularly contracting to a negative -0.4 per cent at the end of the day if there was failure of fiscal stimulus plan for key sectors in the economy.
Oruche, however, stated that the economy going into recession should not lead to panic, saying that such was already expected to happen since the country’s economy was on lockdown for months.
Speaking further, the MAN acting DG said that when key sectors such as aviation, manufacturing, services, agriculture, entertainments, hotels and accommodation and others are locked down for too long, it is expected that the economy would contract.
In particular, he pointed out that the country’s manufacturing sector was currently operating at 20 per cent capacity utilisation with other key sectors in the same position in terms of slow growth and contribution to the GDP.
Oruche said: “Well, the pandemic is a global thing, so it is not going to be only Nigerian economy that will go into recession. Most economies in the world will go into recession in Q2 2020 when the results are out.
“But whatever it is, you can see a complete lockdown in our economy for four months now, such as aviation, entertainment, service, agriculture sectors and others.
“For instance, the manufacturing sector is about 20 per cent capacity utilisation currently, so there is no way an economy like that won’t go into recession. So it is not about soothsaying or about prophecy, it is the reality on ground that is facing us.
“But the main issue at hand now is how do we get out of the recession when it comes in Q2 2020? So, throwing money into it cannot solve the problem.
“Government should know this by now. What we should do now is to sit down and look at all the areas of concern at this COVID-19 period because we are still in COVID-19, even though people are just saying post-COVID-19 instead of post-lockdown.
“You should know COVID-19 is still with us probably till the end of this year, until a cure or vaccine is discovered. That is when we should now be talking about post-COVID-19.
“You will see that when the third quarter result is released by NBS, we will not be surprised of the outcome because it will be negative GDP growth.
“There was no positive business in the economy basically for the last four months because the whole economy was in total lockdown and that has shown that lockdown is not the best solution, because looking at our environment, looking at who we are, we can’t stay in one place, if we do, hunger will kill us here because nobody is there to help us, unlike European countries and America, where they locked down their economies and their governments fed them and cared for them.
“Here, government does not feed anyone because they don’t have the fund, forget about the hoax going on that doesn’t make sense. So we should expect recession in Q2 2020.”

 

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