By Anthony Areh
The Manufacturers Association of Nigeria (MAN) has predicted a slide into recession of the Nigerian economy by the end of the 2nd quarter of year 2020.
MAN Acting Director-General, Mr Ambrose Oruche blamed the projection on the several months of total lockdown of the Nigerian economy in a bid to curtail the spread of the ongoing COVID-19 pandemic.
“Following non –activity in all the key facet sectors of Nigeria’s economy in the last four months amid COVID-19 lockdown policy, the country’s Gross Domestic Product (GDP) is bound to contracting into recession in Q2 2020.
“Indeed, MAN’s position on the Nigeria’s GDP contraction into recession in Q2 2020 is coming on the heels of the Finance Minister, Zainab Ahmed’s statement that the coronavirus outbreak was expected to further slowdown the country’s fragile GDP growth.
“The manufacturing sector and other key sectors of the economy are expected to witness fragility in performance growth amid disruption in trade (demand and supply chains).
“Particularly contracting to a negative -0.4 per cent at the end of the day if there was failure of fiscal stimulus plan for key sectors in the economy,” he recalled.
Oruche, however, stated that Nigeria’s economy going into recession in Q2 2020 should not be a panic situation for the Federal Government and Nigerians as a whole.
He stressed that such preposition was already expected to happen since the country’s economy was in total lockdown for months without activities in key sectors of the economy.
“The COVID-19 pandemic was a global crisis and it won’t be only Nigeria that will be experiencing contraction in her economy as other developed and developing economies of the world are bound to contract into recession too,” he said.
Speaking further on the prediction, the MAN acting DG pointed out that the country’s manufacturing sector was currently operating at 20 per cent capacity utilization with other key sectors similarly in same position in terms of slow growth and contribution to the GDP.
He advised government to incentivise raw material import at zero duty charges, invest in research and development of raw materials.
“Well, the pandemic is a global thing, so going into recession is not going to be only Nigerian economy that will go into recession also, most economies in the world will go into recession in Q2 2020 when the results are out.
“For instance, manufacturing sector is about 20 per cent capacity utilization currently, so there is no way an economy like that won’t go into recession.
“So it is not about soothsaying or about a doom prophet, it is a reality on ground that is facing us.
“But the main issue at hand now is how do we get out of the recession when it comes in Q2 2020?
“Throwing money into problem cannot solve the problem, government should know this by now.
“Government should do more by instituting laws to protect infrastructure, call a roundtable between the Organized Private Sector and the government to aggregate all the sectors affected by the pandemic and then tackle from there.
“The need of the manufacturing sector is beyond monetary intervention; what we need is patronage, infrastructural development.
“If you give me money and I use all to provide power, tar road, what then do I use as capital for the business?
“What we should do now is let us sit down and look at all the areas of concerns at this COVID-19 period because we are still in COVID- 19, even though, people are just saying post COVID-19 instead of post lockdown, ” he said.