The Presidential Economic Advisory Council (PECA) has warned that Nigeria could slip into another recession following the impact of coronavirus on global economy, which includes the crash of oil price. The council made this known during a meeting with President Muhammadu Buhari.
It was stated that Nigeria risks another recession – four years after the last recession – due to the economic downside of coronavirus, part of which is the slow economic growth, significant decline in oil price $29 and trade imbalances.
The council, which is led by Prof Doyin Salami, also pointed out depletion of foreign reserves as other negative impacts the virus would have on the economy, so Nigerian government has to provide concrete measures to stabilise the economy in order to avoid recession.
Aside from the dire economic consequences brought to the attention of President Buhari, the Presidential Advisory Council also advised that the government consider budget cut. Nairametrics had already reported that the Finance Minister Zainab Ahmed revealed the Federal Government would be reviewing the N10.59 trillion budget.
In a statement released by the President’s media aide, Femi Adesina, the following was stated, “Noting that many countries around the world may go into economic recession, the PEAC advocated hard work for Nigeria to keep its head above the waters.
“Recommending, among others, a possible revision of the 2020 budget, with priority spending on healthcare, re-prioritisation of expenditure on infrastructure to focus on projects nearing completion with pro-poor effects, curtailing recurrent expenditure, mobilising the private sector to strengthen health sector infrastructure, and boosting of government revenue, the PEAC stressed that the projections may seem dire, but the worst may be avoided with hard work and scrupulous implementation of policies.”
FG prepared for oil price fall? According to President Buhari, the government had expected a possible fall in the price of oil. He said he’s aware that the price had fallen between $29 and $30 per barrel, which is below the $57 benchmark for the 2020 budget.
While he was specifying the measures that would be taken to stabilise the economy, President Buhari said, “We will see how to survive fallen prices, as we already envisaged the problem.”