It’s official: Nigeria is in recession as we enter the last quarter of 2016. This is no doubt a big blow and a bad addition to the myriad of crises in its economy.
The assessment by the National Bureau of Statistics (NBS) reflected the dwindling oil fortunes and rebased economy, which earlier placed it as Africa’s largest economy and a candidate for world’s best 20 economies in the next four years.
The grim statistics marked a symbolic reversal of fortunes after more than a decade of robust growth.
Sampler: The 2.6% contraction in gross domestic product from a year earlier follows a 0.4% annual decline in the first three months of the year, meeting the shorthand definition of a recession as two consecutive quarters of economic contraction.
The most violent hit to the economy came from the oil sector, where income plummeted by more than 17% from a year earlier.
Acute energy and power scarcity occasioned by destruction of oil and gas pipelines are further signs that even more businesses will shut down and the few companies operating may be checking out better and more clement climates within the sub-region like neighbouring Ghana and even less fanciful Togo and Benin Republic.
The next day, Aero Contractors, the country’s oldest working airline grounded its flights.
Established in 1959, the airline is suspending operations indefinitely.
Naira has not fared better. Its light dims everyday against all known currencies, especially, the US dollar. Now, a dollar exchanges for an unprecedented N430.
A particularly hard situation often needs a radical solution. The “Strategic Agenda for the Naira” espoused by a former Governor of the Central Bank of Nigeria (CBN) Prof. Charles Chukwuma Soludo in 2007 could be dusted up.
We believe the proposal to redenominate the Naira may deal with the worsening inflation occasioned by the dollar crunch and a drop in oil earnings and non-oil exports. The present administration should muster enough resolve to tackle the issues.
With nearly two years of its term over, it cannot continue to blame all the problems on its predecessors.
We are confident that the Muhammadu Buhari administration has the political will to reverse the dismal fortunes of the Naira and the economy.
http://www.fxmallam.com/wp-content/uploads/2016/05/s1.reutersmedia.net_.jpg429644adminhttp://www.fxmallam.com/wp-content/uploads/2016/09/LogoScopic.jpgadmin2016-09-02 10:00:452016-09-02 10:00:45Time To Redenominate The Naira - Leadership