- With many Nigerians made unemployed by COVID-19, combined with lower volumes of exports such as oil, Nigeria's economy has contracted by 6.1% year on year in the second quarter of this year.
- 27% of Nigeria’s labor force (over 21 million Nigerians) are unemployed.
- There’s also little sign of a quick turnaround in Nigeria’s economic woes as the World Bank predicts Africa’s most populous country is set for its worst recession in four decades.
The effects the coronavirus pandemic has had on Africa’s largest economy is starting to show in data.
Nigeria’s economy contracted by 6.1% year on year in the second quarter of this year, latest reports from Nigeria’s statistics bureau show. The dip follows thirteen quarters of positive but low growth rates. The -6.1% decline is also Nigeria’s steepest in the last 10 years.
As with most other economies around the world, the sharp drop in Nigeria’s GDP growth is largely down to the slowdown in economic activity after the country resorted to a lockdown back in April to curb the spread of the virus. In the wake of the pandemic the World Bank forecast a decline of -3.2% for 2020—a five percentage point drop from its previous projections.
While the lockdown has since been eased in the wake of “heavy economic costs,” the continued rise in cases—especially in Lagos, Nigeria’s economic hub—means the local economy is yet to fully re-open. So far the country has recorded just over 52,000 cases and 1,002 deaths.
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But Nigeria’s economy has also been crippled by external factors too as the coronavirus pandemic resulted in a near-total shutdown of economic activity around the world. The accompanying steep drop in oil prices amid a drop in global demand left Nigeria drastically shorn of earnings given its dependence on the commodity as its biggest revenue source. For context, the United States slashed its Nigerian crude oil imports oil by 11.67 million barrels in the first five months of 2020, compared to what it bought in the same period of 2019. In fact, in the second quarter of 2020, local oil production dropped to its lowest since 2016—when Nigeria endured a full year of negative growth.
The latest economic data shows Nigeria’s government continues to fall far short of projections in its Economic Recovery and Growth Plan, created in the aftermath of the 2016 recession to set out aggressive growth targets from 2017 to 2020. There’s also little sign of a quick turnaround in Nigeria’s economic woes as the World Bank predicts Africa’s most populous country is set for its worst recession in four decades.
The details of Nigeria’s economic contraction also come barely a week after a grim report on unemployment rates which showed 27.1% of Nigeria’s labor force (21.7 million Nigerians) are unemployed.