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Governors’ Forum Cautions on Risk of Recession

The Chairman of the Nigeria Governors’ Forum (NGF), Governor Abdulaziz Yari of Zamfara State has asked Nigerians to prepare for challenges in light of a possible recession cycle in the country by 2020. He made this disclosure at the induction programme for newly elected and re-elected Governors, organised by the NGF in Abuja on Monday, 29th April 2019. Warning that the tenure ahead of them may not be smooth sailing, he stated that past and outgoing Governors benefitted from the relatively high crude oil prices that obtained between 2011 and 2014 and the fall in prices that followed, adversely affected a number of States. He therefore called for a serious consideration into diversifying the economy to mitigate against the crunches resulting from absolute reliance on oil. The International Monetary Fund (IMF) had projected a positive growth in Nigeria’s Gross Domestic Product (GDP) earlier in April 2019 in its Executive Board 2019 Article IV consultation with Nigeria report. However, the IMF at its Spring meeting in Washington DC less than a month later, advised Nigeria and other developing countries to take preventive measures to mitigate against negative impacts in the event of a global economic downturn. In September 2018, the Central Bank of Nigeria (CBN) at the Monetary Policy Committee meeting had acknowledged the existence of factors that are indicative of threats to Nigeria’s economic recovery from recession. However, the CBN has dismissed the alarm of a relapse into recession as raised at the NGF induction programme. The CBN Deputy Governor on Economic Policy, Dr. Joseph Nnanna, who represented the CBN Governor at the public presentation of the Spring edition of Regional Economic Outlook (REO) by the IMF in Abuja, insisted that Nigeria is making smooth progress and is likely to have between 2.8% and 3% GDP growth rate by the end of 2019. He however, added that the estimated GDP growth rate is not enough considering Nigeria’s population and noted that the per capita growth rate is still negative.

The possibility of economic instability in the tenure ahead of the Governors-elect brings to mind the recently passed New Minimum Wage Bill, increasing minimum wage in Nigeria to thirty thousand Naira and the likelihood of its enforcement across States. One of the primary duties of a Government is to ensure the welfare of its citizens. The question that begs an answer is the ability of the Government to rise up to this responsibility in light of prevailing circumstances.


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