Financial analysts in the country have attributed the unexpected positive growth of 0.11per cent (year-onyear) recorded in the nation’s economy in Q4’20 to the credit interventions of the Central Bank of Nigeria (CBN), state development banks and others.
The economy slid into recession when it contracted by 3.62 per cent in Q3’20, following an earlier contraction of 6.1 per cent in the previous quarter.
Analysts had predicted that it would take the economy at least until the second quarter of this year to re cover from the Covid-19-induced recession given that the country was already grappling with low growth even before the onset of the pandemic.
However, Q4’20 Gross Domestic Product (GDP) numbers released by the National Bureau of Statistics (NBS) last Thursday showed that the economy recorded positive growth of 0.11per cent even as full year growth for 2020 was a negative 1.92 per cent.
Reacting to the NBS report in a note obtained by New Telegraph, analysts at FBNQuest Research stated: “Several times we have made the point that Nigeria’s performance would be more muted than that of most emerging markets due to the protection its large informal economy enjoys from global headwinds (such as COV ID-19).
The argument still holds but it could now be that the credit interventions of the CBN, state development banks and others are starting to have an impact (although the fourth quarter is generally the sector’s best).”
Similarly, in their reaction, analysts at Financial Derivatives Company (FDC) Limited, said: “The just released GDP growth numbers affirm the fact that the Nigerian economy is on its recovery path.
Contrary to market expectations, the Nigerian economy recorded positive growth of 0.11 per cent (year-on-year) in Q4’20 after two consecutive quarters of negative growth.
This puts full year growth for 2020 at -1.92 per cent and implies that the recession is over.
The surprise recovery was driven by the resumption in most business activities. “The Nigerian economy is off to a strong start postcovid with the positive Q4’20 growth numbers. It is safe to say that the combination of the fiscal stimulus packages, accommodative monetary policy and other relief plans, have achieved the desired objective.”