CBN: Nigeria may slip back into a recession

The monetary policy committee of the Central Bank of Nigeria says the economy’s exit from recession may be under threat.

While reading out the outcome of the two-day meeting of the committee to reporters on Tuesday, Godwin Emefiele, CBN governor, said: “The Committee was concerned that the exit from recession may be under threat as the economy slowed to 1.95 and 1.50 per cent in Q1 and Q2 2018, respectively.

“The Committee noted that the slowdown emanated from the oil sector, with strong linkages to employment and growth in other key sectors of the economy.

“In this regard, the Committee urged government to take advantage of the current rising oil prices to rebuild fiscal buffers, strengthen government finances in the medium term and reverse the current trend of decline in output growth.

“The MPC also called on the fiscal authorities to intensify the implementation of the Economic Recovery and Growth Plan (ERGP) to stimulate economic activity, bridge the output gap and create employment.”

Other threats to the economy noted by the committee were “the potential impact of liquidity injection from election-related spending, and increase in FAAC distribution, which is rising in tandem with increase in oil receipt.”

The economy slipped into a recession in 2016 and exited in September 2017.