Abdulaziz Yari, the governor of Zamfara State, who also doubles as the chairman of the Nigerian Governors’ Forum, has warned that Nigeria may head for another economic recession due to the decline in the price of oil.
Yari projected that the vital oil industry maybe hit by another weaker global prices, which has fallen from highs of about $112 a barrel in 2014 to below $75 at the moment.
Yari, while speaking at the opening ceremony of an induction programme for newly-elected and returning governors in Abuja, said “this scenario is a wake-up call for all of you to come amply prepared to face these kinds of challenges.”
“We are expecting the possibility of another cycle of recession by mid-2020 and which may last up to third quarter of 2021,” he added.
Similar thoughts was also shared by the monetary policy committee of the Central Bank of Nigeria in December 2018.
Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, said the economy had started showing signs of weakness.
According to Emefiele, the slowdown emanated from the oil sector, with strong linkages to employment and growth.
Yari, therefore, advised that governors to “look inward by boosting your revenue generation base” and also use the revenue judiciously.
The Zamfara State governor said the outgoing governors have agreed that borrowing is not a good means of solving economic problems.
He urged the incoming governors to multiply revenue generation base so as to “change the course of doing government business for the betterment of the people”.
Nigeria’s economy exited recession in 2017 after suffering contraction for five consecutive quarters.
Critics say government policies made a bad situation even worse. The decision to delay devaluing Nigeria’s currency meant many businesses struggled to get foreign currency to pay for imports, which had a worse effect on the entire economy.
The slump in global oil prices hit Nigeria hard with the government getting about 70% of its revenues from oil sales.