World Bank report shows Nigeria will plunge into recession as crude oil prices drop

World Bank report shows Nigeria will plunge into recession as crude oil prices drop

World Bank report shows Nigeria will plunge into recession as crude oil prices drop
World Bank report has shown that Nigeria will plunge into severe economic recession as crude oil prices drop and the novel coronavirus [ COVID-19 ] pandemic which may last for forty years.


According to the report, with the drop in oil prices, government revenues are expected to fall from an already low eight per cent of GDP in 2019 to a projected five per cent in 2020.

The World Bank, in a new report, titled ‘Nigeria in times of COVID-19: Laying foundations for a strong recovery,’ estimated that Nigeria’s economy would likely contract by 3.2 per cent this year.

“This projection assumes that the spread of COVID-19 in Nigeria is contained by the third quarter of 2020,” it said.

The bank said if the spread of the virus became more severe, the economy could contract further.

It said, “Before COVID-19, the Nigerian economy was expected to grow by 2.1 per cent in 2020, which means that the pandemic has led to a reduction in growth by more than five percentage points.

“The macroeconomic impact of the COVID-19 pandemic will likely be significant, even if Nigeria manages to contain the spread of the virus. Oil represents more than 80 per cent of Nigeria’s exports, 30 per cent of its banking-sector credit, and 50 per cent of the overall government revenue.”

The Country Director for Nigeria, World Bank, Shubham Chaudhuri, said, “While the long-term economic impact of the global pandemic is uncertain, the effectiveness of the government’s response is important to determine the speed, quality, and sustainability of Nigeria’s economic recovery.