Opinion: Nigeria: Are We Heading Towards A Recession Or Depression?, By Muhammad Hassan Liman
However, a depression is least likely in the Nigerian situation, as experts predict that most countries will come out of the current crisis by 2021 and at most by 2022. On the optimistic side of things, if the government does the needful…then the recession might be short lived.
A fall in stock prices and analogous indices are not always the indicator of an impending recession. Sometimes, the fall might be temporal, which will be accompanied by a spike. However, a monumental fall in prices to a record low and a fall in major driving sectors of the market, are usually indicators of a looming recession. The market capitalisation lost over N1.87 trillion and the All Share Index lost about 20.73 per cent off its points to drop to 26,867.
Consumer spending is usually high when the economy is doing well. However, with the recent contraction of the economy, both consumer to business and business to business transactions are taking hits, the month on month inflation rate is steadily rising at 12.26 per cent in March 2020, in comparison to the rate in January and February . This will also hurt consumer confidence and spending power.
However, a depression is least likely in the Nigerian situation, as experts predict that most countries will come out of the current crisis by 2021 and at most by 2022. On the optimistic side of things, if the government does the needful in bailing out industries, if oil prices keep rising in view of budget cuts, if the government further diversifies the economy and also implements the Orosanye report or at least a better modified version of it, then the recession might be short lived.
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