IMF: Nigeria's Recession To Reflect Buhari's Military Regime Economy

Nigeria is heading for another recession, and it will be the second worse recession ever in the history of the country, this is according to new projection by the International Monetary Fund (IMF) on Nigeria's economic growth for 2020, resulting from the COVID-19 pandemic.

What Happened To Nigeria's Economy?

AllNews had reported that the COVID-19 pandemic led to a nationwide shutdown of businesses, with the economy paralysed for about three months.

The Nigerian government had ordered nationwide restrictions on land, water, and air movements in late March, leaving only essential businesses and humanitarian services to continue their activities under strict measures. The economy began a gradual reopening in May.

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The restriction on movements caused a shutdown of the economy, costing businesses millions of naira, while household income was slashed and stopped, thereby, negatively impacting sectoral contributions to the Nigerian economy.

Extent Of Lockdown Impact On Nigeria's Economy

As an oil-dependent nation, Nigeria was very exposed to the onslaught of COVID-19 as the oil price fell to one of its lowest prices in a decade. Demand also took a nosedive as the restriction on movements prevented individuals from needing fuel or crude oil compared to pre-COVID-19, flooding the oil market with crude oil than needed.

This reduced Nigeria's oil revenue in the second quarter of this year, and in the first quarter, the crude oil price had also dropped pre-COVID-19 due to the oil price war between Saudi Arabia and Russia, which saw both countries pumping the market with more oil at a low price.

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With a decline in oil revenue and other vital sectors like aviation - which was shut down for four months - the impact of COVID-19 and the lockdown on the economy will result in a resemblance of the 1983 recession, AllNews gathered from IMF's October World Economic Outlook report.

In 1983, under Muhammadu Buhari's military regime, Nigeria's economy contracted by -10.93 percent, the worse in the history of Nigeria, and 37 years later, the country is heading towards another recession under Buhari as President.

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However, the IMF stated that the gross domestic product (GDP: economy) will contract by 4.3 percent in 2020 in real terms.

Note that in April, IMF had initially projected that Nigeria's economy will collapse by -3.4 percent in 2020, then in June, the global credit body projected that the economy will decline by 5.4 percent.

Recovery for Nigeria: AllNews gathered from the IMF report that Nigeria's economy will recover by 1.7 percent next year. Note that the economy falls into recession when GDP contract twice in a consecutive quarter - already, Nigeria's economy fell by -6.10% in Q2 2020 and projected to contract in the third quarter this year.