Expert forecast dangers ahead for Nigeria economy
An expert in the economy sector Lukman Otunuga has warned the federal government to pay attention to the economy sector of the country.
Africa’s largest economy by gross domestic product (GDP) remains tied to oil revenues, the most significant source of foreign exchange earnings which helps bolster its foreign reserves used to defend the local currency, the naira. Uncertainties in oil revenue earnings, therefore, portends a great danger for the economy as a whole.
Otunuga further explained that aside the raging trade disputes between China and the US, the fall in Nigeria’s GDP in Q2, 2019 signals another danger ahead.
He said, “Nigeria’s GDP slowed down to 1.94 percent in the second quarter from 2.1 percent in the first quarter, following the trend seen in several economies such as Germany and the UK.”
“While the GDP data should nudge the Central Bank of Nigeria (CBN) to cut interest rates for the second time this year in September in an effort to stimulate growth, this is a temporary fix to a bigger problem.”
Otunuga explained that the trade disputes similarly have direct bearing on the performance of Africa’s biggest economy, adding that persistent trade disputes between the world’s two largest economies are set to fuel fears over a global slowdown or even recession.
“In the context of a trade dispute, tariffs “are like bombs exploding on trading relationships, supply deals and eventually on company profits.”
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