Poor crude oil prices, remittances from Nigerians in diaspora responsible for looming recession in Nigeria – Matthew Page

Matthew Page, an associate fellow of the Chatham House Africa Programme in London has said the dwindling crude oil prices and non-remittances from Nigerians abroad and in diaspora are responsible for the looming financial and economic meltdowns being predicted by economic analysts, including Nigeria’s Minister of Finance, Zainab Shamsuna Ahmed to befall Nigeria sooner or later.

The non-resident fellow with the Centre for Democracy and Development in Abuja while speaking on the effect of Nigeria’s Post Hydrocarbon Economy on ‘The Osasu Show’ on Friday asserted that the negative impact of the global pandemic on the Nigerian economy is already overwhelming.

He said, “It is a complicated story, as you know, everything in Nigeria is complex and multi-tasking, what Nigeria is facing now with the coronavirus crisis is the after effect of the global economic impact of the pandemic.

“So we know that crude oil prices for example has gone way down, there is a huge impact on Nigeria’s government revenues, likewise remittances from Nigerians living abroad and diaspora have gone way down as well”.

“And that is a really significant impact on Nigeria’s gross domestic product, that many of them don’t really appreciate quite how much money flows back into Nigeria from Nigerians living abroad”.

“So when I sounded the alarm from Chatham house last week, I wasn’t trying to talk Nigeria down but to tell people something they are already aware of in terms of the socio economic and financial challenges Nigeria is faces, but rather linking it to a crisis which currently people are viewing in terms of the medical side and human side, the cause of the illness and deaths people are experiencing.

“In the really sense, if we look beyond the immediate concerns, there are going to be really significant long term economic and financial consequences to the crisis that we need to appreciate now before it is too late”. He stated.

Speaking on a way forward, what we need to start doing now to plan for post hydrocarbon economy, in order to advert the looming recession already predicted by the Nigerian government itself, with external reserve depleted to $72million, Page has these to say:

“Well, as we know, one can’t turnaround an ocean liner in a flip second, there is need to really begin immediate strategic changes and reforms into how the Nigeria government operate and how it funds itself and I’m not just talking about the federal government”.

“In political discussions, people always tend to heap blames on one side or the other but the fiscal and financial challenges that Nigeria faces today are products of decades and decades of poor decision making by government leaders, both at the federal level, the period of military rule, and also at the state levels”.

“As well all know, Nigeria is a collection of 36 states, which decides for themselves both in terms population, economy, budget of small African countries and smaller other countries in the world”.

So there is a multi-layer answer to that question, so it starts with reigning in waste, reigning in corruption, of course, at the Federal and States level and that has to be more than cosmetics and lots of the cosmetics stuff has already been done by this administration, and instead of some really tougher sacrifices in choices that need to be made, Nigeria is resilience, it is the giant of Africa but as we know”.

Mr Page had on May 12, 2020 published an article christened ‘Coronavirus: Nigeria’s Fiscal Flu’ and asserted that Nigeria’s public finances entered the crisis in an already precarious state. Oil income directly accounts for roughly half of federal government revenues (opens in new window) but, rather than choosing to limit habitual borrowing and wasteful spending, federal and state leaders have long acted as if a crude oil price boom would someday rescue public finances. A paragraph reads.