The Lagos Chamber of Commerce and Industry (LCCI) has projected a further perpetuation of the current recession on the Nigerian economy should the reverberating effects of COVID-19 pandemic persist into Q1-2021.
Director-General, LCCI, Dr Muda Yusuf, disclosed this on Sunday in the chamber’s economic outlook presentation for 2021.
He urged the quick implementation of structural reforms including the review of the foreign exchange management framework and significant investment critical infrastructural developmental projects.
Yusuf projected the pace of recovery to remain gradual within the region of one per cent in year 2021 in the absence of shocks.
“The economy was faced with positive but sluggish growth before the pandemic with real GDP growth averaging 1.94 per cent between Q2-2017 and Q1-2020, much below population growth rate of 2.6 per cent,” he said.
Yusuf added that recovery to growth trajectory was expected to take full course most likely in Q2-2021 due to base effect of Q2-2020 when output contracted steeply by 6.1 per cent.
“We expect the pace of recovery to remain gradual within the region of one percent in year 2021 in the absence of shocks.
“In our view, Nigeria’s recovery prospects depend largely on oil price and production level as Gross Domestic Product performance in recent quarters has significantly mirrored trends in both variables.
“It is instructive to note that Q2-2017 growth recovery was facilitated by rebound in international oil prices rather than government’s intervention efforts.
“We see a similar type of recovery in year 2021. However, shocks including resurgence in COVID-19 pandemic and significant oil price volatility are the major downside risks,”he said.
Yusuf listed COVID-19 resurgence, African Continental Free Trade Area, power sector reforms, finance bill 2020, passage of petroleum Industry Bill, and new national economic development plan as factors that would shape the Outlook for 2021.
This, the Director-General noted, was to foster economic resilience in year 2021.
“The adverse impact of the pandemic on the country’s fiscal resources propelled the Federal Government to undertake long-standing policy reforms including the partial removal of fuel subsidies.
“Also, the introduction of service-reflective tariff model, transmission of the Petroleum Industry Bill (PIB) to the National Assembly and reduced dependence of CBN financing of the budget deficit.
“Towards the end of year 2020, there was strong momentum towards the discovery of COVID-19 vaccine and this positive development is expected to strengthen global economic rebounds in year 2021 in the absence of any major shocks,” he said. (NAN)