Dear Subscriber,

Q2 GDP data released by the NBS on Monday showed that the economy shrank by 6.1%. This follows a Q1 positive growth of 1.87%. The cumulative contraction in economic activity for H1’20 is 7.97%. Of the 46 activities tracked by the NBS, only 13 grew positively, the 33 others witnessed negative growth.

The pandemic and the lockdown tipped the economy into its sharpest fall in a decade. The economic sustainability plan, complementary monetary policy and quantitative easing appear to be inadequate in preventing Africa’s largest economy from falling into a recession in Q3. Policy makers now face a quadrilemma of juggling four unpleasant scenarios: negative growth, increasing inflation, external sector weakness and growing unemployment.

The policy trade-offs will likely steer Nigeria back to recovery, but only if rapid steps are taken this quarter.

In this publication, the FDC Think-Tank analyzes the GDP numbers for Q2 and its implications.

Do enjoy your read…