Brazil’s Economy Goes Into Recession

(FILES) File photo taken on March 06, 2021 of closed stores and empty streets after non-essential services were shut down at midnight and until March 20 in the state of Sao Paulo, amid the novel coronavirus COVID-19 pandemic, in Sao Paulo, Brazil. (Photo by Miguel SCHINCARIOL / AFP)


Brazil’s economy, the largest in Latin America, slid into recession in the third quarter of the year as agricultural production dropped, the government said Thursday.

GDP declined 0.1 percent for the second straight quarterly fall, the government statistics agency IBGE said.

The drop in the second quarter was revised to a larger 0.4 percent from the initial estimate of 0.1 percent compared to the previous three months.

In comparison to the third quarter of 2020, the economy grew four percent, the agency said.

Farm production fell 8.0 percent in the third quarter, while manufacturing was flat and the services sector grew 1.1 percent, the agency said.

Brazil’s GDP slowdown in the second quarter ended the recovery it had started in late 2020 after the collapse it suffered due to the Covid-19 pandemic.

Nigeria Exited Recession ‘Faster Than Expected’ – World Bank

A file photo of a resident at a market in Akure, Ondo State. Photo: Sodiq Adelakun
A file photo of a resident at a market in Akure, Ondo State. Photo: Sodiq Adelakun


The World Bank has said that Nigeria moved out of recession faster than its forecasts had predicted.

“Following a 6.1 percent year-on-year contraction in 2020 Q2, Nigeria’s economy
contracted by 3.6 percent in 2020 Q3, and expanded by 0.1 percent in 2020 Q4,
moving out of recession faster than expected,” the bank said in its Africa’s Pulse, a biannual analysis of the near-term macroeconomic outlook for the region published in April.

“For the year, Nigeria’s real GDP is estimated to have contracted by 1.8 percent, a stronger outturn than projected in the October 2020 forecast.”

READ ALSO: OPEC+ Approves Oil Output Increases From May

Meanwhile, the bank said it expects Nigeria’s economy to grow by 1.4 percent in 2021 as the country continues to recover.

“Nigeria, South Africa, and Angola, the region’s three largest economies,
are expected to return to growth in 2021, partly owing to higher commodity prices, but the recovery will remain sluggish,” the bank

The bank added that Nigeria’s economic growth is expected to be slower than other countries in West Africa due to inflation, high unemployment and COVID-19.

The country’s growth will be “driven by telecommunications services, trade due to the gradual opening of borders, agriculture due to an additional influx of labor, and construction, in a context of higher oil prices and fewer mobility restrictions,” it said.

“However, consumer spending and business investment are likely to remain subdued in 2021 as double-digit inflation, high unemployment, and the slow rollout of the COVID-19 vaccine weigh on households’ real income and business confidence.

“Limited fiscal space will also constrain the recovery. Growth is projected to pick up to 2.1 percent in 2022 as rising oil output bolsters exports, and the rollout of the COVID-19 vaccine gathers pace, helping to boost private consumption and fixed investment.

“Progress on the liberalization of the exchange rate regime could boost private sector activity and support stronger economic growth.”

Friday Update: Kagara Abduction, Nigeria Exits Recession And A Historic Landing On Mars

Good morning.

We are leading with the latest updates from the Kagara school attack, Nigeria’s exit from recession, and a historic landing on Mars.

Government Science Secondary School, Kagara, in Niger State was attacked by gunmen on February 17, 2021.
Government Science Secondary School, Kagara, in Niger State was attacked by gunmen on February 17, 2021.

Hunt For Kagara Abductees Continues

At least 41 persons, many of them students, were kidnapped on Wednesday morning after gunmen attacked Government Science College, Kankara, in Niger State. The State Government published the names of the abductees on Thursday.

The police said it had deployed additional tactical, intelligence, and investigative assets to solve the kidnapping and other related cases in the state.

Meanwhile, just 24 hours after the Kagara attack, gunmen attacked some other Niger communities, killing at least one person. Many others sustained injuries.

Shehu Sani: The former lawmaker urged the government to negotiate with the abductors as they have nothing to lose and will not hesitate to harm the abductees.

Quote: “Kidnappings or abductions and violence has been a daily issue,” Mr. Shehu said. “You can use whatever you want to use, be it helicopter or operation Puff Adder or whatever operation you want to use against the bandits, but I think in the interest of the safety and for the lives of these boys, hold on with your bravado, with your helicopter and planes until these boys are safely negotiated out of danger.”

Abubakar Bello: The Niger State Governor, after meeting with the President in Abuja, said the lasting solution to the state’s insecurity challenge is to engage the bandits peacefully. “I understand some of these bandits are tired and need to be looked after; we need to train them, to engage them,” he said.

Tukur Buratai: The ex-Chief of Army Staff told the Senate Committee on Foreign Affairs it may take Nigeria at least 20 years before it can resolve its security challenges. Former Chief of Defence Staff, Abayomi Olonisakin also told the lawmakers Nigeria’s next warfare and crisis will be in the forests. The ex-Service chiefs are being grilled by the Senate before their confirmation as ambassadors.

Ike Ekweremadu: The former Deputy Senate President is insisting on the creation of State Police as the solution to insecurity across the country.

A file photo of a resident at a market in Akure, Ondo State. Photo: Sodiq Adelakun
A file photo of a resident at a market in Akure, Ondo State. Photo: Sodiq Adelakun

Nigeria Exits Recession

The National Bureau of Statistics on Thursday announced that Nigeria has emerged from recession.

The country had slipped into recession under the weight of the coronavirus pandemic and falling oil prices last year.

Although the Finance Minister, Zainab Ahmed, had predicted a recovery in the first quarter of 2021, NBS data showed that the economy grew by 0.11 percent in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters.

Analysis: Economist Bismark Rewane said he was pleasantly surprised by the news. He attributed the recovery to government policy, support from the World Bank and IMF and, of course, a rebound in oil prices.

A health worker prepares an injection of the AstraZeneca/Oxford Covid-19 vaccine on February 7, 2021 at the Mignot Hospital in Le Chesnay near Paris. ALAIN JOCARD / AFP

NAFDAC Approves AstraZeneca Vaccine

The National Agency for Food and Drug Administration and Control (NAFDAC) has approved the use of the Oxford/AstraZeneca COVID-19 vaccine in Nigeria.

The vaccine, which can be stored at 2 to 8-degree centigrade, is the first to be approved by the agency.

According to the Director-General of NAFDAC, Dr. Mojisola Adeyeye, three additional vaccines are being evaluated for approval.

Although the AstraZeneca vaccine appears not to work against the South Africa variant of the virus, it is effective against the UK variant, which has been found in Nigeria.

NCDC: The disease control agency reported 869 new cases of the virus and eight deaths on Thursday. The country’s total caseload is now just a few hundreds from hitting the 150,000-milestone.

What else is happening?

Leah Sharibu: Thursday made it three years since the Dapchi schoolgirl was kidnapped, along with 109 others. While most of the girls have been released, Sharibu wasn’t after she refused to renounce her Christian faith. Many in her community still believe she will return someday.

Apapa: The Lagos State Government has asked articulated truck owners to vacate the port city.

IPOB: The Nigerian Army has commenced an operation against what it describes as “illegal training camps” in Orsu Local Government Area of Imo State and neighboring communities.

Benue: The State Government has shut down a popular private school, Vaatia College in Makurdi, following the outbreak of Guillain-Barre, a rare illness that left nine students paralysed.

Junaid Mohammed: The Second Republic lawmaker is reportedly dead after a brief illness. He was 71.

Edo: The State Government said it will not cede any part of its land for cattle grazing. “Our position on the matter of grazing land is clear and has not shifted, which is that there is no free land for grazing in Edo State,” a statement said.

NASA: The American space agency has successfully landed its Perseverance rover on the surface of Mars. The robot will now embark on a multi-year mission to look for signs of life on the red planet. “The question of whether there’s life beyond Earth is one of the most fundamental and essential questions we can ask,” said NASA geologist Katie Stack Morgan.

That’s it for today and the week. See you on Monday.

COVID-19 Takes Its Toll On African Economy

An undertaker from the AVBOB funeral house in Soweto, carries into a cold storage room the remains of a COVID-19 coronavirus patient on July 21, 2020. MARCO LONGARI / AFP


Africa has so far been spared the worst of the coronavirus pandemic in terms of cases and deaths but its economy has not been so lucky, especially the poorer, smaller countries dependent on a single resource or sector.

The spread of the disease has also picked up speed in recent weeks, stoking concerns that worse is to come.

Here are some key features of the pandemic’s economic impact on Africa:

– Historic recession –

For 2020, the International Monetary Fund (IMF) estimates that the economy of sub-Saharan Africa will shrink 3.0 percent, “the worst outcome on record”. However, it should then grow 3.1 percent next year — although this is a much slower pace than elsewhere in the world.

In terms of per capita income, it has fallen 5.3 percent and back to 2013 levels in the space of just a few months.

Abebe Aemro Selassie, the head of the IMF’s African division, highlighted the fact that unlike in the 2008-09 global financial crisis, sub-Saharan countries were in a much worse budgetary position, with fewer resources available to face the crisis than their wealthier peers.

– Different countries, different impact –

African countries can be classified as three economic types:

— Diversified, such as in West Africa, with Ivory Coast, Senegal and Ghana. In the east, Kenya, Uganda and Tanzania.

In these economies, activity has slowed significantly but they are still managing to grow, the IMF says.

— Oil producers such as Algeria, Angola and Nigeria. They have suffered very badly from the plunge in crude prices, especially in the early months of the crisis.

READ ALSO: COVID-19: Five Things To Know About Landmark UK Vaccine

Since then, prices have firmed slowly to arrive back at around $50 per barrel.

— Tourism-dependent countries such as Morocco, Tunisia and the Seychelles. The pandemic has brought travel to a virtual standstill, grounding airlines, which are struggling to survive.

“The crisis has confirmed the differences between diversified countries and the exporters of industrial raw materials but has also impacted North African countries which were in a growth rebound thanks to tourism since 2016,” noted Clement Gillet, economist with Societe Generale.

Standing on its own, South Africa, the continent’s second-biggest economy, has been hit the worst given that it was already in recession before the crisis hit.

Its economy is expected to shrink 8.0 percent this year.

– Raising funds –

Again, the picture is mixed when it comes to how different countries manage debt and raise fresh funds.

On the one hand, there is Zambia, which is heavily dependent on mining and became the first country to default on its debt last month, while Ivory Coast only two weeks later easily raised funds on the market.

Since then, “the financial markets have found their appetite for risk again, and especially for African debt, but investors are going to be much more careful about the details” and quality of the issuers, said Gillet.

Another important source of funds for African countries is remittances from their foreign workers and inevitably this has also suffered in the pandemic.

According to the World Bank, such remittances are expected to fall 14 percent to about $470 billion going into 2021.

“The impact of Covid-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances,” said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Group at the World Bank.

– Debt –

G20 countries have already put in place a moratorium on interest payments for some 47 countries, most of them in Africa.

The G20 has also said its members are ready to re-negotiate some of the debt itself but such moves have limits.

“Firstly, about 40 percent of African debt is accounted for by the private sector,” and not by governments, noted Kako Nubukpo, an economist and a former minister of Togo.

“Certain countries, such as Benin, with a lot of private sector debt, oppose the moratorium because they fear that when they return to the market to raise fresh funds their risk premium will explode,” he said.

But Senegal on the other hand has welcomed the debt service moratorium, he added.

At the same time, Gillet noted the profile of Africa’s creditors has changed, “which makes any restructuring agreement very complicated”.

“Up until the end of the 1990s, you could get all the creditors around a table,” he said.

“But now you have the debt owed to China, which is not part of the Paris Club (of state creditors), then the debt owed to the private-sector lenders (the London Club of bankers), and then above all the debt raised on the markets.”

Recession: Ortom Reads Riot Act To LG Chairmen Over Financial Impropriety

A file photo of Benue State Governor, Samuel Ortom


The Governor of Benue State, Samuel Ortom, has charged the 23 elected local government chairmen on transparent utilization of funds in order to improve on their Internally Generated Revenue to cope with the challenges brought by the economic recession.

Governor Ortom gave the charge on at a two-day management training on technical and administrative competence in the state.

He urged them to live above board, noting that a single act of financial indiscretion could lead to difficult times for the people whose safety and welfare is top priority.

Read Also: Again, Nigeria’s Economy Slips Into Recession

The governor also advised the administrators of the third tier of government to look inward in the face of the recession as looking up to the state and federal government, which have their own challenges, would amount to a waste of time, if they do not add value themselves.

Nigeria’s Economy May Emerge From Recession In 2021 Q1, Says Emefiele

File photo of CBN Governor, Godwin Emefiele


The Central Bank of Nigeria (CBN) has predicted that the nation’s economy may emerge from recession in the first quarter of 2021.

CBN Governor, Godwin Emefiele, who made the prediction on Friday during the 55th annual Bankers Dinner which held in Lagos, noted that the expected economic growth was two per cent.

“With the sustained implementation of our intervention measures, we do expect that the Nigerian economy could emerge from the recession by the first quarter of 2021,” he said.

“We also expect that growth in 2021 would attain 2.0 per cent. However, downside risks remain, as restoration of full economic activities, particularly in service-related sectors, remains uncertain until a COVID vaccine is produced and made available to millions of people across the world.

“Second, with the significant rise in cases in advanced markets and the imposition of lockdowns in parts of Europe, concerns remain on the impact this could have on growth in advanced economies, commodity prices and the financial markets.”

READ ALSO: ‘Jonathan Has Been Working For Buhari’s Government,’ APC Tells PDP

The CBN governor also called for measures to “insulate our economy from the impact of these shocks through our diversification efforts, while also working to ensure that we adhere to safety protocols in order to prevent a surge in COVID-19 related cases, as this could further cripple economic activities.

“Our actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee meeting of November 23 & 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices.”

Emefiele’s remarks come six days after Nigeria’s economy slipped into another recession, the second of its kind in a space of four years.

According to a new report released by the Nigeria Bureau of Statistics on November 21, the economy shrank again in the third quarter of this year.

The nation’s economy maintained a second consecutive negative growth after contracting by 3.62 per cent in the third quarter.

The cumulative Gross Domestic Product (GDP) for the first nine months of 2020, therefore, stood at -2.48 per cent just as it recorded a -6.10 per cent in the second quarter.


Gov. Godwin Emefiele, CON

Address at the 55th Annual Bankers Dinner

Lagos, Nigeria

27 November 2020



It is indeed a pleasure to once again address the banking community at the 55th Annual Bankers Dinner, being organized by the Chartered Institute of Bankers of Nigeria (CIBN). Since I assumed office as the Governor of the Central Bank of Nigeria in June 2014, I have attended 6 consecutive annual dinners by the CIBN. These dinners provide a significant opportunity for me to engage with stakeholders in the banking and finance community on events that are shaping our economy, and the policy measures being embarked upon by the Central Bank of Nigeria to support greater economic growth and continued stability of our financial system.

Let me at this juncture, specially thank the leadership of the Chartered Institute of Bankers of Nigeria led by its President, Mr. Bayo Olugbemi. I appreciate Mr. Seye Awojobi and his team, for their efforts in putting this event together. I want to also extend my gratitude to the Managing Directors/Chief Executive Officers of our banks and other financial institutions who have found time to attend the conference despite their very busy schedules.

Likewise, I welcome my colleagues from the CBN, especially the Deputy Governors, and other senior management of the Bank who are present. And to everyone at this event whether in person or virtually, I would like to thank you for attending.

This dinner comes at a challenging time for our nation, taking into account the impact of COVID-19 on the global economy. In Nigeria, we had to address the public health challenge, in addition to implementing a variety of policy measures aimed at reversing the unprecedented downturn in economic activities during the first half of the year. The emerging reports on progress in developing a vaccine by several firms is indeed reassuring, as it indicates that a solution to the health challenge is in sight. It will also help to support growth in the medium term, by aiding full restoration of economic activities particularly in service related sectors such as education, aviation, hospitality and tourism.

In my remarks today, I hope to provide an assessment of the measures taken by the Central Bank of Nigeria in addressing the impact of the COVID-19 pandemic on the Nigerian economy, as well as our outlook on the path ahead.

Pre-COVID-19 Economy

As we are all aware, prior to the onset of the virus in December 2019, the Nigerian economy was on a positive growth trajectory, having made a significant recovery from the 2016-2017 recession, which was triggered by the drop-in commodity prices in 2016. Following the recession, we witnessed 12 consecutive quarters of economic expansion, and GDP growth in the fourth quarter of 2019 stood at 2.55 percent. Our exchange rate remained stable for over two years at N360/$ and our external reserve witnessed significant accretions from the sale of crude oil and continued inflows from foreign investors.

Our banking system remained strong, as key indicators reflected improvements across several areas. Capital adequacy ratio for the banking industry was above 15 percent, surpassing the prudential requirement. The ratio of non-performing loans declined from 11 percent in April 2019 to less than 6.1 percent by January 2020. Our intervention efforts in the agriculture and manufacturing sectors continued to support employment generating activities and improved local production of goods that can be produced in Nigeria.


The onset of the COVID-19 pandemic in the first half of 2020, and the lockdown measures put in place to contain the spread of the virus, caused an unprecedented shock to the global economy. Global economic downturn, which was particularly significant in the second quarter of the year, saw declines in growth in advanced and emerging market countries, such as the  United States (-9.5 percent), United Kingdom (-20 percent), India (-24 percent) and South Africa (-17 percent). As a result, far-reaching measures were taken by fiscal and monetary authorities in advanced and emerging markets to stabilize their respective economies.

Like other economies, the Nigerian economy was not immune from the COVID-19 shock in 2020. Nigeria’s gross domestic product (GDP) contracted by -3.4 percent in the third quarter, a welcome improvement from the – 6.1 percent recorded in the second quarter.

The negative rate of growth was due to a series of external factors in addition to the lockdown measures, imposed in order to curtail the spread of the virus. Some of the key constricting factors were: Crude Oil Restriction on global travel by land and air; along with the slowdown in commercial activities, led to a significant reduction in the demand for crude oil, which contributed to a 65 percent decline in crude oil prices between January and May 2020. The drop in crude prices, along with OPEC reduction of Nigeria’s production quota led to a significant decline in our foreign exchange earnings, along with a more than 60 percent decline in revenues due to the federation account.

Today, crude oil prices have recovered from its low of US$19 per barrel in April 2020 to US$45 per barrel in November 2020; but it is yet to return to pre-pandemic levels of over US$60 per barrel as at January 2020. GDP growth in the oil sector in the third quarter remained subdued due to the OPEC restrictions on oil output.

Restrictions on Movement GDP growth particularly in the manufacturing sector was significantly impacted by the restrictions on movement as many factories and businesses operated at limited capacity, in addition to a decline in demand for service-related activities, which require extensive in person contact, such as transportation, hospitality and tourism.

Global Supply Chains

Significant disruptions in domestic and global supply chains as a result of lockdown measures in key markets in Asia and Europe between March and May 2020, affected delivery of inputs and machinery to firms in Nigeria and this contributed to a slowdown in manufacturing activities. Some countries such as India and Vietnam imposed restrictions on the exports of vital materials in order to meet the needs of their local market. This challenge reinforces the need to build more resilient systems that can support our production needs in times of crisis.

Capital Flows

The impact of the pandemic and the resulting slowdown in economic activity, led to a significant outflow of funds from emerging market economies. Foreign investors withdrew over $100bn worth of funds from emerging markets between February and April 2020. These funds were  subsequently invested in safe haven assets such as US treasury bills and the Japanese Yen. The increase in outflows from emerging markets also led to a corresponding depreciation in the currencies of several emerging market countries such as Brazil (- 27.3%), Turkey(-35.1%), Argentina(-35%), Russia(-20%), Angola(-27%) and South Africa(-9%) year to date.

Exchange Rate

Like other emerging market countries andcountries reliant on oil exports, the decline in crude oil earnings as well as the retreat by foreign portfolio investors significantly affected the supply of foreign exchange into Nigeria. In order to adjust for the decrease in supply of foreign exchange, the naira depreciated from N305/$ to N360/$ and subsequently to N380/$. With the decline in our foreign exchange earnings and successive exchange rate adjustments, the CBN has continued to implement a demand management framework, which is designed to bolster the production of items that can be produced in Nigeria, and aid conservation of our external reserves.

Due to the unprecedented nature of the shock, we continued to favour a gradual liberalization of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which, rapid changes in the exchange rate could have on key macro-economic variables. This we believe is in line with international best practices in countries where managed float arrangements are in operation. At the same time, measures are being taken by the authorities to improve our non-oil exports and other sources of foreign exchange.

These measures have helped to prevent a significant decline in our reserves. Our external reserves currently stand above $35 billion and are sufficient to cover 7 months of import of goods and services. Inflation Inflationary pressure persisted during the year due to several factors. In addition to the disruption to global and domestic supply chains as a result of COVID-19, inflation was exacerbated by the increase in VAT rate, petroleum prices, electricity price adjustments, farmer-herder clashes, exchange rate adjustment, and flooding that occurred in many parts of our farm belt areas. Inflation in October 2020 stood at  14.2 percent. We however expect inflation to begin to moderate by the first half of 2021 as efforts are being made to enable significant cultivation and production of key staple items in the dry season.

Response by the Monetary and Fiscal Authorities

Given the impact on COVID-19 on key economic variables earlier mentioned, the fiscal and monetary authorities took unprecedented measures to prevent any long-term damage to the growth prospects of our economy. Our first objective was to restore stability to the economy by providing assistance to households and businesses that had been severely affected by the pandemic. In addition, we sought to stimulate economy activity through targeted interventions in critical sectors such as agriculture, manufacturing, electricity and construction. Cumulatively our intervention efforts represent about 3.5 percent of Nigeria’s GDP. Some of these measures we took include:

  1. A cumulative reduction of the monetary policy rate from 13.5 to 11.5 percent between May and September 2020 in order to spur lending to the economy.
  2. A 1-year extension of the moratorium on principal repayments for CBN intervention facilities;

iii. Regulatory Forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic

  1. Reduction of the interest rate on CBN intervention loans from 9 to 5 percent
  2. Strengthening of the Loan to Deposit ratio policy, which has resulted in a significant rise in loans provided by financial institutions to banking customers. Total gross credit rose by over 21 percent over the past year, from N15.5 trillion to N19.54 trillion. In addition, over N738 billion has been provided as credit to manufacturing related activities by the banks.
  3. Creation of N150 billion Targeted Credit Facility (TCF) for affected households and small and medium enterprises through the NIRSAL Microfinance Bank. Already, N149.21 billion has been disbursed to 316,869 beneficiaries. Given the resounding success of this program and its positive impact on output growth, we have decided to double this fund to about N300 billion, so as to accommodate many more beneficiaries and boost consumer expenditure which should positively impact output growth.

vii. The Bank also disbursed AgriBusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS) (N92.90 billion to 24,702 beneficiaries), Anchor Borrowers Program (ABP) by the sum of N164.91 billion to 954,279 beneficiaries.

viii. Mobilization of key stakeholders in the Nigerian economy through the Coalition against COVID19(CACOVID), which led to the provision of over N28bn in relief  materials to affected households, and the set-up of 39 isolation centers across the country.

  1. Creation of a NGN100 billion intervention fund in loans to pharmaceutical companies and healthcare practitioners intending to expand and strengthen the capacity of our healthcare institutions; so far 60 health care related projects are being funded to the tune of over N60 billion as a result of the intervention.
  2. Creation of a research fund, which is designed to support the development of vaccines in Nigeria.
  3. Establishment of a N1 trillion facility in loans to boost local manufacturing and production across critical sectors; 53 major manufacturing projects, 21 agriculture related projects and 13 service projects are being funded to the tune of over N360 billion from this facility.

Results of our interventions

The impact of these measures along with the removal of restrictions on movement and resumption of international travel, led to improvement in key indicators of the economy, as several economic activities returned to positive growth.

A sectoral assessment of economic activities in the third quarter indicates that the economy witnessed positive growth in key sectors such as Information and Communications Technology, Agriculture, Health, Construction, Finance and Insurance and Public Administration. The Agricultural sector continued to record positive growth supported by productivity gains in the sector, interventions by the government, and improved demand for local produce.

The Manufacturing Purchasing Managers Index, in the month of November stood at 50.2 points, indicating an expansion in manufacturing activities after six months of contraction. A total of 18 sectors recorded positive growth in the third quarter relative to 13 sectors in the second quarter, which reflects significant improvement in economic activity.

Furthermore, 36 out of the 46 economic activities tracked by NBS, reflected positive improvements in growth, which includes activities that recorded negative growth.

In the Investors and Exporters Window, close to $150m is being traded daily as a result of our measures to sanitize activities in the foreign exchange market. In addition, the Nigerian Stock Exchange All Share index rose by 65 percent between April and November 2020, reflecting improved sentiments by investors on the fundamentals of publicly listed companies. As a result of these measures, GDP growth in the third quarter, improved to -3.6 percent from -6.1 percent in quarter two, even though the economy fell back into a recession. We however expect that Nigeria would emerge from the recession by the first quarter of 2021, due to high frequency data that indicates continued improvements in the non-oil sector of our economy.

Financial System Stability

With the decline in economic activities, the CBN instituted measures in the banking system, in order to prevent an economic crisis from spilling over into a financial crisis.

Inaction on our part would have led to a wave of bankruptcies by firms along with rising unemployment, which would ultimately have a significant impact on the balance sheet of banks. As a result, we ensured that;

  1. Banks made adequate capital provisions to cover for unexpected losses
  2. We supported viable businesses that had been affected by the pandemic through access to our intervention funds

III. We enabled banks to restructure loans granted to sectors affected by the

pandemic. As a result of these measures, NPL ratios has remained low at 5.7 percent. The capital adequacy ratio of the banking industry, at 15.5 percent, remains above the prudential requirement percent. In addition, return on earnings in the banking sector was over 21 percent as at October 2020. Similarly, Other Financial Institutions (OFIs) recorded a remarkable improvement as aggregate assets grew by N582 billion, or 16.94 per cent (year-on-year), to N4.02 trillion as at end-September 2020.

While the news of the continued growth in the banking and finance sector in the third quarter of the year is encouraging, the ultimate strength of our financial system would depend on three key factors;

  1. Ensuring that banks have adequate capital buffers to withstand similar pandemics.
  2. Developing adequate internal controls that will be able to identify potential risks to banks, such as cyber threats, as well as putting in place measures to contain these risks.

III. Being able to adapt your business model to changes taking place in the business environment.

This last point is vital as COVID-19 has demonstrated the impact externally induced disruptions could have on the Nigerian economy. It is therefore imperative from an economic as well as a security perspective, that the banking and financial system works to support growth in sectors that have significant growth potential, and can enhance the resilience of the Nigerian economy, in the face of external shocks.


With sustained implementation of our intervention measures, we do expect that the Nigerian economy could emerge from the recession by the first quarter of 2021. We also expect that growth in 2021 would attain 2.0 percent. However, downside risks remain, as restoration of full economic  activities, particularly in service related sectors, remains uncertain until a COVID vaccine is produced and made available to millions of people across the world.

Second, with the significant rise in cases in advanced markets and the imposition of lockdowns in parts of Europe, concerns remain on the impact this could have on growth in advanced economies, commodity prices and the financial markets.

We must therefore find ways to insulate our economy from the impact of these shocks through our diversification efforts, while also working to ensure that we adhere to safety protocols in order to prevent a surge in COVID-19 related cases, as this could further cripple economic activities.

Our actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee meeting of November 23 & 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices.

Given the fact that the rise in inflation is not due to monetary factors but rather the prevalence of structural rigidities and supply shocks, traditional tools of monetary policy may not be helpful in addressing current inflationary pressures. Rather, a more useful policy will be the supply-side measures implemented by the Bank. As a result, emphasis will be placed on strengthening the development finance initiatives of the CBN in order to stimulate greater production and reduce unemployment.

We intend to increase our support for measures that will aid improve cultivation of local produce in Nigeria, with particularly emphasis on improving our yield levels, as food inflation continues to remain the key driver of inflationary trends.

The banking sector therefore has a significant role to play as a facilitator of growth in the agriculture sector, through its intermediation function. Some of the opportunities in the agriculture sector that banks should explore include ways to address some of the existing gaps in the agriculture value chains, such as storage centers, transport logistics, and technology  platforms, that can enable rural farmers to sell their produce directly to the markets. These measures would help to improve productivity of farmers, reduce post-harvest losses, increase access to finance for farmers and improve sourcing of local raw materials for processing by manufacturing and industrial firms. It will also aid improved production of local goods, enable the creation of jobs, while supporting the growth of other sectors of our economy such as manufacturing, and transportation.

Information Communication Technology

Another sector which has emerged as a significant source of resilience in mitigating the impact of COVID-19 on the economy, has been Information and Communications  Technology (ICT). In the third quarter of 2020, the ICT sector made contributions of over 17.8 percent to GDP growth, 47 percent higher than its contributions a year earlier.

The growth of startups in the fintech and health care space rose in response to the pandemic. It is important that we leverage ICT as an enabler for growth in key sectors of the economy.

ICT start-ups are emerging to support SMEs, farmers, and in providing quality learning to students. It is important that the banking sector consider viable IT firms in these areas that have the potential to not only serve the needs of the local market but are also able to export ICT related services to countries across the world. India for example exports close to a $100bn worth of ICT related  services every year and I believe that our ICT industry can make significant contributions to our export earnings.

The Central Bank recently issued Payment Service Banks licenses to 3 firms as part of our efforts to drive financial inclusion and ensure that majority of Nigerian citizens are banked. The Payment Service Banks, along with Mobile Money Operators and Banks are expected to leverage ICT channels in improving penetration of digital financial services and products to Nigerians. Driving sustainable growth of our economy would require that the banking industry, support the growth of ICT firms that are inclined to improve productivity across key sectors in the economy.

Infrastructure Finance

Another critical area that the banking sector ought to consider for stable growth of our economy is Infrastructure Finance. With the decline in revenues due to federal and state government as a result of the drop in crude oil prices, alternative ways of funding infrastructure are critical if we are to generate sustained growth of our economy. As we are all aware, the cost of logistics is often seen as a significant impediment to the growth of businesses in the country.

A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multipliereffect on growth by enabling the expansion of business activities in the country. We believe that a well-structured infrastructure fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.


Distinguished ladies and gentlemen, in concluding my remarks, let me assure all Nigerians that the Monetary and Fiscal authorities are alive to their responsibilities to restore the economy back to recovery.

At this point, I would like to seize this opportunity to appeal to Nigerians, particularly our Media Economic Analysts.

We confess that the problem we face today is of a global dimension. The global economy is challenged, just like the Nigerian economy. My appeal to our media analysts  is that in the course of conducting their analysis of the Nigerian economy, they should realize that their public comments particularly if they are alarmist, create panic in our environment. We cherish their counsel but urge that they be more constructive in their pungent criticisms, which could hamper our efforts to return our country and economy back to recovery. When you overdramatize the problem, you create panic that slows the process of recovery.

While COVID-19 has brought on several challenges to our economy and indeed the banking sector, it offers a unique opportunity for us to build a more resilient economy that is better able to contain external shocks, whilst supporting growth and wealth creation in key sectors of our economy. Proactive steps on the part of stakeholders in the banking and financial system in supporting the growth of sectors such as agriculture, ICT and infrastructure, will strengthen our ability to deal with the challenges that have been brought on by COVID-19 while enabling the growth of our economy in general.

I thank you for your attention.

Godwin I. Emefiele (CON)


Central Bank of Nigeria

27th November 2020


India Enters Recession, Worst Among Major Economies

File photo of the Indian flag


India’s economy contracted 7.5 percent between July and September, performing the poorest among major advanced and emerging economies and entering a technical recession for the first time since independence, official data showed Friday.

Although the figures were an improvement on the record 23.9-percent contraction recorded last quarter, they indicate that Asia’s third-largest economy is in for a tough fight as it attempts to revive demand and create jobs even as coronavirus infections climb.

The two successive quarters of contraction mean that the country has now entered a “technical recession” for the first time since 1947.

After virus-led lockdowns ravaged the globe, the growth recorded by major economies including the United States, Japan and Germany during the quarter ending on September 30 raised expectations that India would also enjoy a revival.

But, while consumer businesses saw a boost due to increased spending in the run-up to the October-November festive season, hopes of a broader recovery were dashed, with the construction and hospitality sectors taking a hit.

Farming continued to be a relatively bright spot, while manufacturing activity also increased during the July-September period after plunging nearly 40 percent during the previous quarter due to the lockdown.

New Delhi has struggled to kick-start an economy that is expected to shrink 9.5 percent this year, according to estimates released by India’s central bank governor Shaktikanta Das last month.

The International Monetary Fund has meanwhile predicted that India’s economy would contract by 10.3 percent this year, the biggest slump for any major emerging economy and the worst since independence.

A report by Oxford Economics released earlier this month said that India would be the worst-affected economy even after the pandemic eases, stating that annual output would be 12 percent below pre-virus levels through 2025.

India’s economy had struggled to gain traction even before the pandemic, and the hit to global activity from the virus and one of the world’s strictest lockdowns combined to deal the country a severe blow.

The shutdown in the vast country of 1.3 billion people left huge numbers of people jobless almost overnight, including tens of millions of migrant workers in the shadow economy.

The government has since been easing restrictions to revive activity, announcing two stimulus packages to offer farmers easier access to credit and dole out benefits to small-scale businesses.

The relaxation measures have been deployed even as the coronavirus continues to ravage the country,  which has registered more than 9.3 million infections — second only to the United States — and over 135,000 deaths.

In a speech Thursday, central bank governor Das warned that the recent surge in virus cases and the imminent threat of new lockdowns posed further risks to the economy.

“We need to be watchful about the sustainability of demand after the festivals and a possible reassessment of market expectations surrounding the vaccine,” Das said.


Economic Recession: CBN Retains Key Lending Rates


The Monetary Policy Committee has retained key lending rates at 11.5%.

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, announced this on Tuesday, saying it is part of efforts to boost the economy towards a sustainable recovery from the recession.

“Members voted in line with the most pressing need towards reversing the recession and achieving medium-term macro-economic stability.

“In view of the fore-going, the committee decided by a unanimous vote to retain all parameters,” Emefiele said.

“In summary, MPC voted 1, to retain MPR at 11.5%, (2), retain asymmetric corridor of +100 and -700 basis points around the MPR, (3) retain Cash Reserve Ratio at 27.5% and (4), retain liquidity ratio at 30%.”

This comes days after a new report released by the Nigeria Bureau of Statistics, showed that Nigeria had slipped into another recession after the economy shrank in the third quarter of this year.

Read Also: Again, Nigeria’s Economy Slips Into Recession

The same happened in 2016, making it the second recession in a space of four years.

The cumulative Gross Domestic Product (GDP) for the first nine months of 2020, therefore, stood at -2.48 per cent just as it recorded a -6.10 per cent in the second quarter.

According to Emefiele, the recession was anticipated and measures had been put in place to manage its impact.

Meanwhile, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, on Monday, said the country will exit recession by the first quarter of 2021.

Recession: SERAP Asks Buhari To Cut Cost Of Governance

SERAP Asks Buhari To Probe Bribery Allegation Against Ganduje


Human Rights group, Socio-Economic Rights and Accountability Project (SERAP) say it has written an open letter to President Muhammadu Buhari asking him to cut the cost of governance and implement bold transparency and accountability measures in response to Nigeria’s second recession in five years.

This was disclosed in a statement signed on Sunday by SERAP deputy director Kolawole Oluwadare.

“Socio-Economic Rights and Accountability Project (SERAP) has sent an open letter to President Muhammadu Buhari urging him to put the country’s resources at the service of human rights, and to support the less well-off to enjoy an adequate standing of living through cutting the cost of governance and implementing bold transparency and accountability measures in your government’s response to Nigeria’s recession,” the statement read in part.

READ ALSO: Again, Nigeria’s Economy Slips Into Recession

The group said the economic crisis rocking the nation provides an opportunity to prioritise access of poor and vulnerable Nigerians to basic socio-economic rights, and to genuinely recommit to the fight against corruption.

SERAP said: “Implementing human rights, transparency and accountability measures would save money, address projected adverse human rights impacts of the recession, and fast-track the economic recovery process.

“Decades of mismanagement and corruption, and deep-seated deficiencies in public financial management have directly contributed to higher levels of borrowing and public debts, and consequently, the economic recession. Successive governments have squandered the promise afforded by the country’s natural wealth and resources.”

The group said further that the paltry resources Nigeria invests in essential public goods and services that would benefit ordinary Nigerians can be partly explained by the “high spending of public funds to finance a life of luxury for members of the National Assembly, state governors, and other ‘powerful’ politicians.”

SERAP said it is seriously concerned about the adverse consequences of the economic crisis on the human rights of poor and vulnerable Nigerians, including denying them access to essential public goods and services such as healthcare, education, clean water, and regular electricity supply.

They said they would be grateful if the Federal government “begins to implement the recommended action and measures within 14 days of the receipt and/or publication of this letter. If we have not heard from you by then as to the steps being taken in this direction, SERAP shall take all appropriate legal actions to compel your government to implement these recommendations for the sake of human rights, transparency, and accountability.”

According to SERAP, prioritising the human rights of poor and vulnerable Nigerians means providing public goods and services free of charge for those who cannot afford them.

“This is the time to prioritise poor and vulnerable Nigerians, and to ensure that any response to the recession goes well beyond bailing out large companies and banks,” the statement added.

Official figures published by the NBS on Saturday, November 22 show that the economy shrank again in the third quarter of this year.

The nation’s economy maintained a second consecutive negative growth after contracting by 3.62 percent in the third quarter.

The cumulative Gross Domestic Product (GDP) for the first nine months of 2020, therefore, stood at -2.48 percent just as it recorded a -6.10 percent in the second quarter.

The same happened in 2016, making it the second recession in a space of four years.


SERAP also urged President Buhari to do the following in order to cut the cost of governance and solve the problem of recession:

  1. Increase investment in public health, the healthcare system, education services, provision of clean water, and other basic public goods and services that will benefit the majority of the population;
  2. Re-direct budgetary allocations to renovate the National Assembly complex and take urgent steps to ensure that essential public goods and services are available to poor and vulnerable Nigerians;
  3. Improve transparency and quality of the information in government budgets and reform public financial management to bring it in line with international standards, and safeguard the right of media and civil society to speak out against corruption and human rights abuses;
  4. Direct the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) to urgently undertake a downward review of remuneration and allowances of all political office holders including President, Vice-President state governors and their deputies, and members of the National Assembly, consistent with the provisions of paragraph N, 32[c][d] of the Third Schedule, Part 1 of the Nigerian Constitution;
  5. Regularly and widely publish full accounts of projected and actual government revenues and expenditures;
  6. Immediately instruct the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) to jointly investigate allegations of systemic and widespread corruption in MDAs, as documented by the Auditor-General of the Federation, and to ensure effective prosecution of those suspected to be involved, and recovery of any stolen public funds;
  7. Ensure independence of the Office of the Auditor-General of the Federation i.Regularly and widely publish full accounts of projected and actual government revenues and expenditures;

ii. Immediately instruct the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) to jointly investigate allegations of systemic and widespread corruption in MDAs, as documented by the Auditor-General of the Federation, and to ensure effective prosecution of those suspected to be involved, and recovery of any stolen public funds;4. Ensure independence of the Office of the Auditor-General of the Federation

New Zealand Plunges Into Recession As Economy Shrinks By 12%

New Zealand Bans Assault Weapons After Christchurch Massacre
File photo: New Zealand Prime Minister Jacinda Ardern speaks to journalists during a press conference at the Justice Precinct in Christchurch on March 20, 2019. Marty MELVILLE / AFP


New Zealand plunged into recession for the first time in a decade Thursday, as data confirmed a record-breaking economic collapse that forced Prime Minister Jacinda Ardern to defend her pandemic response ahead of next month’s general election.

The 12.2 per cent contraction in April-June was “by far the largest” since records began, national data agency Stats NZ said, with the country put into a strict lockdown for almost two months and the country’s borders closed.

Ardern rejected opposition accusations that the tough measures had pushed the economy “off a cliff”, saying the restrictions helped contain the virus, which allowed the business to resume far earlier than in many other countries.

The centre-left leader, who will go to the polls re-election on October 17, also pointed out that New Zealand had recorded just 25 Covid-19 deaths, out of a population of five million.


File photo: Prime Minister of New Zealand Jacinda Ardern (C) with New Zealand Police Superintendent Bruce Bird (L) and Whakatane Mayor Judy Turner (R) speak to the media about the eruption of Whakaari/White Island during a press conference in Whakatane on December 10, 2019. Marty MELVILLE / AFP.


“Success for me is saving people’s lives, supporting and saving people’s businesses, coming out the other side (of the crisis) faster, quicker and with more activity,” she told reporters.

“I back our results.”

She said the economic pain of lockdown in the June quarter would be followed by a rebound in July-September when virus-related restrictions were eased significantly.

Ardern retains a strong lead in opinion polls and is expected to retain office, despite the ugly pre-election economic figures.

Finance Minister Grant Robertson said it could have been much worse, with budget papers in May predicting a 23.5 quarterly decline and Treasury forecasting a 16 percent drop just this week.

“There is no way that any political party could claim that there would not have been a recession in New Zealand during this period,” he said.

“This is a one-in-100-year global economic shock.”

– ‘This was traumatic’ –

The opposition National Party said the figures showed a change of government was needed because Ardern’s administration could not properly manage the economy or the pandemic response.

“It is now official that we are in the deepest recession in living memory and it’s proof that New Zealand needs a National-led government now that has a very clear plan,” National leader Judith Collins said.

She said New Zealand “compares very unfavourably” with neighbouring Australia, which recorded an economic contraction of seven percent in the June quarter after adopting a more flexible approach to lockdowns and border controls.

New Zealand’s most recent recession was in 2008-09 and until the first three months of this year it had recorded non-stop quarterly growth since 2010.

The second-quarter decline follows a 1.6-percent contraction in the first three months of 2020, confirming widespread expectations that New Zealand is in recession.

Kiwibank chief economist Jarrod Kerr said the figures were unprecedented.

“We’ve never seen anything like this. It was traumatic,” he said.

“Service exports were stonewalled, and down 40 percent in the quarter, consumption was down 12 percent, and investment was slashed by 20 percent.”

But he said the figure was a one-off that was set to be followed by a growth surge of 10 percent in the September quarter, which would also be a record.

“Businesses and households have clearly adapted to trading in a world with limited face-to-face contract,” he said.


Global Recession Not As Deep As Expected – OECD


The global recession this year will not be as deep as expected as a result of countries’ efforts to counter the economic fallout from the coronavirus pandemic, the OECD said on Wednesday.

But the recovery next year will also be more modest than anticipated, the Organisation for Economic Co-operation and Development said, projecting a contraction of 4.5 percent in global economic output this year and a return to growth of roughly 5.0 percent in 2021.

In its previous set of forecasts in June, the Paris-based OECD had been expecting the global economy to shrink by 6.0 percent in 2020 and return to growth of 5.2 percent next year.

“After the initial bounce-back in many activities following the easing of confinement measures, there are some signs from high-frequency indicators and business surveys that the pace of the global recovery has lost momentum since June, particularly in many advanced economies,” the OECD said.

It pointed out, however, that “the economic outlook remains exceptionally uncertain, with the Covid-19 pandemic continuing to exert a substantial toll on economies and societies”.

In the second quarter of 2020, global output more than 10 percent lower than at the end of 2019, “an unprecedented sudden shock in modern times”, the OECD said.

The extent and timing of the pandemic shock differed across the major economies, but all experienced a sharp contraction in activity as necessary containment measures were implemented.

– Prompt and effective action –

Global trade collapsed, declining by over 15 percent in the first half of 2020, and labour markets were severely disrupted by reductions in working hours, job losses and the enforced shutdown of businesses.

“Without the prompt and effective policy support introduced in all economies to cushion the impact of the shock on household incomes and companies, the contraction in output and employment would have been substantially larger,” it said.

Looking at individual economies, China was expected to be the only one to expand in 2020, with projected growth of 1.8 percent.

India, on the other hand, would see its economy shrink by 10.2 percent.

The United States, the world’s biggest economy, would fare better than the global average, with a projected contraction of 3.8 percent this year.

Germany would perform better than the eurozone as a whole, with its economy set to shrink by 5.4 percent, compared with a contraction of 7.9 percent for the single currency area.

The French economy was set to shrink by 9.5 percent, Italy’s by 10.5 percent and Britain’s by 10.1 percent, the OECD predicted.

Future growth prospects would depend on factors including the severity of new virus outbreaks, the type of restrictions imposed, vaccine deployment and the effects of fiscal and monetary policy actions on demand, the OECD said.


UK Inflation Sinks To 0.2 Percent On Virus Stimulus

A handout photograph released by the UK Parliament shows Britain's Prime Minister Boris Johnson during Prime Minister's Questions (PMQs) in the House of Commons in London on July 15, 2020. JESSICA TAYLOR / AFP / UK PARLIAMENT
A handout photograph released by the UK Parliament shows Britain’s Prime Minister Boris Johnson during Prime Minister’s Questions (PMQs) in the House of Commons in London on July 15, 2020. JESSICA TAYLOR / AFP / UK PARLIAMENT



British inflation hit a near five-year low in August on state coronavirus stimulus measures for the troubled hospitality sector, including a restaurant discount scheme and tax cuts, data showed Wednesday.

The annual inflation rate, as measured by the UK’s Consumer Prices Index, dived to just 0.2 percent in August, the Office for National Statistics (ONS) said in a statement.

That was the lowest level since December 2015 and compared with 1.0 percent in July 2020.

“The cost of dining out fell significantly in August thanks to the ‘Eat Out to Help Out’ scheme and VAT cut, leading to one of the largest falls in the annual inflation rate in recent years,” said ONS deputy national statistician Jonathan Athow.

“For the first time since records began, airfares fell in August as fewer people travelled abroad on holiday.

“Meanwhile the usual clothing price rises seen at this time of year, as autumn ranges hit the shops, also failed to materialise,” he said.

The “Eat Out to Help Out” incentive — which was valid Monday to Wednesday throughout August — saw the UK government contribute 50 per cent of the cost of a cafe, restaurant or pub meal, up to £10 ($13, 11 euros) per person.

Britons enjoyed more than 100 million meals under the discount scheme, according to recent data.

The government also slashed valued-add tax on the virus-plagued hospitality sector from 20 per cent to just five per cent.

The tax cut and restaurant scheme were launched by finance minister Rishi Sunak to try to kick-start the British economy, which has been devastated by the pandemic.

Adding to downwards inflationary pressure in August, airlines slashed their ticket prices to attract bargain-hunting Britons, after the deadly Covid-19 pandemic had sparked a global slump in demand for air travel.

The data were published on the eve of a decision from the Bank of England’s monetary policy committee, which is not expected to alter its key interest rate from the current level of 0.1 per cent.

Economists predict that inflation will pick up speed in the coming months as temporary factors fall out of the equation.

“The MPC is unlikely to be too concerned about the threat of deflation ahead of tomorrow’s policy decision,” noted Thomas Pugh at research consultancy Capital Economics.

“The Eat Out to Help Out scheme ended in August. Although some restaurants have kept the discount going by themselves, many have not. And the VAT cut for the hospitality industry will expire on 12 January.”