President Muhammadu Buhari has expressed optimism on the capacity of the Nigerian economy to rebound strongly in the near term with the right policy responses to the multi-dimensional crises created especially by the COVID-19 pandemic.

The economy contracted by 6.1 per cent in the last quarter heralding a slide towards another round of recession in about two years.

Buhari noted that since the government cannot simply wait for things to get better on their own, “we have to formulate appropriate policies and implement them steadfastly in order to address the challenges head on”.

The president said so far, the federal government had implemented a wide range of fiscal, prudential and monetary measures that squarely address four key necessities.

Represented by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, he listed the four measures as ensuring sufficient liquidity, in part to support government programmes for saving lives and livelihoods; maintain stability of the financial system; ensuring continued delivery of financial services to the public; and shore up confidence and cushion economic activity.

He noted that the banking system, which is a critical component of the financial sector, is not immune from the potential impact of the current economic situation as banks have to restructure potentially bad loans in every sector of the economy.

Buhari recalled that it has been nearly six months since the World Health Organisation (WHO) declared COVID-19 a pandemic.

He stated: “Since then, lockdown of varying degrees and durations have been implemented in different jurisdictions of the world, some more successful than others. But while a few countries have reported some successes in fighting the spread of the virus, resurgence in COVID-19 cases continues to be seen in many parts of the globe.

“Consequently, business activities have been disrupted, and the global economy is set to contract this year. The International Monetary Fund, in its report released in June 2020, expects the global economy to shrink by 4.9 per cent this year, worse than the negative 3.0 per cent projection made in April.

“Nigeria is not spared either, as the economy recorded a negative growth of -6.0% in the second quarter according to the data recently released by the NBS.

“This is against the backdrop of the real GDP decline from 2.55% in Q4 2019 to 1.87% during Q1 of 2020 reflecting the earliest effect of disruptions to the global supply chains caused by the COVID-19 pandemic.

“Overall, Nigeria’s real GDP is projected by the National Bureau of Statistics (NBS) to relapse into a second recession in four years from Q3 and to contract by -4.2% in 2020.