CBN Warns That Nigerian Economy Could Slip Into Recession In 2016

Nigeria’s apex bank, the Central Bank of Nigeria has warned that the country’s economy could slip into recession in 2016. The monetary policy committee warned that the Federal Government must take proactive steps to prevent such recession from coming to pass.

The CBN Governor, Mr Godwin Emefiele while addressing journalists shortly after the two-day meeting of the committee held at the CBN headquarters in Abuja noted that the country’s economy has remained weak due to factors such as the slow growth of the country’s Gross Domestic Product in the second quarter of the year. Emefiele also revealed that the committee noticed that the impact of non-payment of salaries at the state and local government levels led reduction in consumer demand. The governor of the apex bank expressed concern that liquidity withdrawals following the implementation of the Treasury Single Account and the elongation of the tenure of state governments and Oil/gas sector loans could worsen worsen the liquidity conditions of banks and affect economic growth unless actions are taken to stem the tide. “The committee noted that the overall macroeconomic environment remained fragile. “The committee noted that liquidity withdrawals following the implementation of the TSA, elongation of the tenure of state government loans as well as loans to the oil and gas sectors could aggravate liquidity conditions in banks and impair their financial intermediation role, thus affecting economic growth, unless some actions were immediately taken to ease liquidity conditions in the markets. “Having seen two consecutive quarters of slow growth, the committee recognized that the economy could slip into recession in 2016 if proactive steps were not taken to revive growth in key sectors of the economy,” he explained. SHARING IS CARING...SHARE THIS POST