According to the domestic product numbers that the National Bureau of Statistics published on Saturday, 21st November 2020, Nigeria has slipped into a second recession in four years.
Nigeria gross domestic product (GDP) figures showed a contraction of 3.62 per cent for the third quarter of 2020. Additionally, it shows that the country’s oil GDP suffered the most with a 13.89% drop.
The last time Nigeria entered recession was in August 2016 due to dropping oil prices. However, the oil output was lower than it was in 2016.
Also, unlike the recession in 2016, this time around, the 2020 recession affected other sectors besides the oil sector. The BBC mentions the arts and entertainment, real estate, professional and technical, service, and education sectors.
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In a report, Aljazeera explained that COVID-19 had hit the Nigerian economy hard. “Nigeria normally accounts for an average output of two million barrels per day. But the effects of the pandemic and low oil prices have cut production to approximately 1.4 million barrels,” the report says.
However, you may be wondering what a recession means for Nigeria. Here is a concise explanation:
A country enters recession after its gross domestic product or GDP shows a negative growth for two consecutive quarters or more. GDP is the total money value or market value of all finished goods or services produced in a country for export.
If you are in Nigeria, the country’s recession status means that cost of doing business will increase amidst reduced sales. The government may stop some projects and lead to loss of jobs for some employed in the public sector. The same thing is attainable in the private sector as employers will try to mitigate loss.
What are your thoughts on Nigeria entering recession twice within four years, in 2016 and 2020? Share with us in the comment section.