Since 2016, there has been a lot of talk about Nigeria being in a recession. While the regular man on the Streets accepts this information, not all of us know exactly what a recession is, or how it affects the economy as a whole.
We only know that the recession causes the prices of things to go up. In this article, we’ll take our time to answer a few questions and get some clarity on this matter.
What is a recession? What are it’s consequences? How Long has Nigeria been in a recession? Is Nigeria out of Recession? Etc. Read on.
What is a Recession?
A recession is simply a period of reduced economic activities. This means that for a couple of Months, usually up to two quarters, there is a reduction in the demand and supply of goods.
It entails a reduction in the rate at which people spend money. There is a reduced demand for products and services in a particular economy.
What are the consequences or Impact of a Recession?
The impacts of a recession are usually far reaching, there are less jobs available, as well as a high rate of Job loss. Economics shows that during a Recession, the prices of things are supposed to go down due to the reduction in demand. In Nigeria though, the case seems to be the other way around.
How Long has Nigeria Been in a Recession?
Nigeria went into a Recession in 2016. That particular Recession was the very first one in the Nation for a generation.
The good news is that we came out of that Recession the following year. The impact of the recession has however still been felt since then as growth of the Economy has been very slow.
While struggling to fight out of this recession, the Coronavirus Pandemic hit the country sending the economy to another downward movement.
In 2020, Nigeria went into another Recession. This recession was the first one since four years ago in 2016.
The recession was blamed on COVID-19 as well as a reduction in the demand of oil leading to a reduction in fuel prices around the globe.
The Lockdown imposed after the first set of cases of the virus in 2020 led to a natural reduction in Economic activity, leading up to a recession by the second and third quarters of 2020.
Is Nigeria Out of Recession?
By the fourth quarter in 2020, the Lockdown in Nigeria was lifted and economic activities began in earnest. Companies re-opened and businesses went back to work.
Nigeria experienced a surprising exit from recession in that fourth quarter of 2020, owing to growth in the Agricultural and Telecommunications industries.
This means that while there was a decline in revenue from oil, there continued to be notable growth in the non-oil sectors.
Owing to this, experts expect the Nigerian Economy to keep growing and recovering even faster since there is greater demand for Oil in 2021 and the prices are looking better.
Nigeria is therefore out of Recession and concentrating on growing her Economy even more.
I hope you find this information useful.