The Central Bank of Nigeria (CBN) has stated that the growth projection for the country’s economy remain weak. This is despite the reopening of the economy fully since the third quarter of 2020.
The CBN said the economy is still being negatively affected by COVID-19 pandemic and the weak crude oil prices that occured last year. The pandemic had caused a temporary, but long lockdown of the economy in Nigeria and globally.
This affected trade transactions between Africa’s largest economy and the rest of the world. The informal sector was shutdown, while the private sector was crippled, with only corporations considered as essential allowed to work.
Nigeria’s economy was significantly affected by this as Non-Oil revenue was depleted and the pandemic also reduced demand for oil globally due to the restriction. This also affected oil revenue.
CBN stated that these two major factors, alongside some structural ones, impacted negatively on the economy’s outlook. But it was not enough to project growth in the fourth quarter last year, CBN said in its 2020 fourth quarter economic report.
Despite stating that the growth prospects is weak, the apex bank said the first quarter of 2021 will experience a resilient growth induced by monetary and fiscal policies, as well as roll-out of COVID-19 vaccines.
“Growth prospects for the Nigerian economy remained weak, as the macroeconomic instability associated with the COVID-19 pandemic and weak crude oil prices, amidst other structural factors, dampen the near-term outlook.
“Staff projections indicated growth of GDP in the fourth quarter of 2020, given current economic fundamentals. The growth is expected to be more resilient in the first quarter of 2021, following continuous monetary and fiscal policies, including the expected roll-out of the COVID-19 vaccine to contain the spread of the virus.”