Kuni Tyessi in Abuja
Gross Domestic Product in Nigeria, as well as other developing economies is estimated to grow by 5 per cent in 2021, after a contraction of 2.6 percent in 2020 as a result of the global lockdown due to COVID 19 pandemic.
Also, many of the now poor are projected to likely be engaged in informal services, construction and manufacturing, as well as sectors in which economic activities was most affected by the lockdown and other minority restrictions.
The Managing Director of Norrenberger Financial Group, Mr.Tony Edeh who disclosed this yesterday in Abuja, said despite the impact of COVID-19, Nigeria recorded growth in the third quarter of 2020.
Speaking to journalists on the impact of the ravaging COVID-19 pandemic in foreign direct investments and the economy of Nigeria, Edeh said: “Nigeria attracted the third-largest foreign direct investment (FDI) inflows of any African country in 2019.”
Speaking on the new financial course for Nigeria, he said the COVID-19 pandemic had cost Nigeria’s economy about over a trillion naira in 2020.
According to him: “GDP in developing economies will grow by 5 per cent in 2021 after contraction of 2.6 per cent in 2020.
Ede said: “Also, in 2020, the most visible and immediate spillover of COVID-19 was the drop in the price of crude oil, which dropped from nearly US$60 per barrel to as low as US$30 per barrel in March. During the pandemic, people were no longer travelling and this led to a sustained fall in the demand for aviation fuel and automobile fuel which affected Nigeria’s net oil revenue, and eventually affected Nigeria’s foreign reserve,” Edeh stated.
“The largest amount of capital importation by type was received through other investments, which accounted for 43.75 per cent ($639.44m) of total capital importation, followed by Foreign Direct Investment (FDI), which accounted for 28.38 per cent ($414.79m) of total capital imported and Portfolio Investment which accounted for 27.87 per cent ($407.25m) of total capital imported in Q3 2020.
“As at the end of Q3 2020, The total value of capital importation into Nigeria stood at $1,461,490,000. This represents an increase of 12.86 per cent compared to Q2 2020 and -74.03 per cent decrease compared to the third quarter of 2019, with total capital importation of $5.62 billion. This amounts to a loss of $4,158,510,000 compared to 2019.”
Speaking on the new financial course for Nigeria, he said due to COVID-19, the Nigerian economy slipped into a recession in the third quarter of 2020 following a GDP contraction of -3.62 per cent, the second recession since 2016.
Ede said: “Recessions in Nigeria have mostly been caused by a fall in the price of crude oil and the absence of large fiscal/monetary buffers in a structurally weak economy. The impact of the 2020 recession on individuals and businesses has been more severe due to the nature of the pandemic. With COVID-19, businesses were forced to shut due to lockdown and social distancing.
“This had a toll on individuals’ income, corporate and government finances. Real losses in real output and other disruptions were estimated at N5.8 trillion in 2020.In nominal terms, this loss is estimated at N11.6 trillion.
“In addition to direct output loss, there have also been significant job losses, income losses, erosion of monetary value, among others. COVID-19 and other disruptions have reversed the gains achieved prior to 2020.”