Governor of the Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, has dismissed fears in some quarters that the Nigerian economy is heading towards recession following the impact of declining revenue resulting from low oil prices for over a year.
Emefiele, who spoke at the end of the IMF/World Bank annual meetings in Lima, Peru, on Sunday evening, asserted that the current dip in the nation’s revenue was a global development, which is not peculiar to Nigeria.
He noted that some of the recent monetary and foreign exchange policies by the central bank was a sign of an economy sliding into recession, asserting that the challenge before Nigerians is to accept the policies as a way of reversing declining revenue.
According to him, “Nigeria is not sliding into recession. We have had two quarters of slow growth; even the global economy has revised its growth outlook from 3.8 per cent in April to three per cent at this meeting.
“That of Africa has been revised from five per cent to 3.75 per cent at this meeting. But it is even projected at 4.25 per cent in 2016. So everyone is affected.
“What we are saying is because we have seen two successive quarters of slow growth, we all need to embrace the policies that we are putting in place both by the monetary and fiscal authorities so that we can see a reversal, so that we can see increased growth, not slowing growth, so no one has talked about the fact that Nigeria is going into recession.
“We are only saying we need to work hard to begin to reverse the trend so that we can move towards positive growth rather than slowing growth.”
The CBN governor, who pointed out that the effect of the commodity crisis was a global one, said the slowdown as a result of the drop in commodity prices coincided with the end of quantitative easing in the US to the extent that the Federal Reserve Bank has been contemplating raising rates through the sale of assets.
He added that geopolitical tensions had also affected many economies and forced them to slowdown, and in some cases had slid into recession.
Emefiele maintained that the recent exit of foreign investors from the Nigerian bond and equities market was not peculiar to Nigeria, adding that about $48 billion was the value of capital outflow from emerging and frontier markets in the third quarter of the year.
He further explained that what was being experienced on the global economic scene was a situation whereby investors were looking at economies where they felt there are opportunities because of the fear that the drop in oil price could affect the economies that depend on oil exports.
“So we have to solve our problems ourselves,” he said, stressing the need for all to embrace all the policies being put in place.
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