Nigeria’s economy to contract by 8.9% as inflation hits 12.34% in April
Nigeria’s economy could shrink as much as 8.9 per cent in 2020 in a worst-case scenario without stimulus, according to Finance Minister, Zainab Ahmed.
Speaking after a virtual meeting of the National Economic Council (NEC) in Abuja, Thursday, Ahmed said a deeper recession than forecast after oil prices plunged due to the coronavirus pandemic was likely in the months ahead.
She told the country’s top advisory body that the contraction could reach 4.4 per cent in the best case, without any fiscal measures.
Meanwhile, Nigeria’s annual inflation rose for the eighth straight month in April, bolstered by higher food prices, according to figures released by the National Bureau of Statistics yesterday stressing that measures to curb the spread of the novel coronavirus hindered economic activities and increased costs.
Inflation, a measure of living costs, climbed to 12.34 per cent in April, its highest level in more than two years, from 12.26 percent the previous month, the National Bureau of Statistics said.
Food inflation, which accounts for the bulk of the inflation basket, rose at a much faster pace, to 15.03 per cent in April, compared with 14.98 per cent in March.
NBS, however, attributed the rise in the food index to increases in the prices of potatoes, yams and other tubers, bread and cereals, fish, oils, fruits and vegetables. Food inflation has been in double digits for more than three years. Early this week, the Buhari administration said it would impose targeted lockdown measures in areas that report rapid increases in coronavirus cases, and that a phased reopening of the economy would go ahead more slowly than planned.
The measures have created bottlenecks for food and other deliveries, in a country where investment is needed in transport infrastructure.
So far, Nigeria has 6,677 confirmed coronavirus cases and about 200 deaths. The inflation data comes ahead of next week’s Monetary Policy Committee meeting of the CBN will weigh inflationary risks and a weaker currency against an economy projected to shrink this year due to the oil price crash caused by the pandemic.
The naira has hit a series of lows on the black market, widening the gap with the official and over-the-counter spot markets, especially after dollar sales were suspended due to a coronavirus lockdown in April and a 15 per cent devaluation in March.