It is now official: Nigeria’s economy is in a recession.
Economic recession is usually defined as having two or more consecutive quarters of negative economic growth.
The Central Bank of Nigeria has stated that its Purchasing Manager Index (PMI) for June 2016 showed that economic activities declined faster in June. This means the decline had been sustained for six consecutive months.
The National Bureau of Statistics had reported that the nation’s GDP in the first quarter of 2016 contracted by 0.36 per cent, the first negative growth in many years.
The current CBN report states that in the manufacturing sector, “Production level, new orders, and employment level and raw material inventories declined at a faster rate, while supplier delivery time improved at a faster rate.” In the non-manufacturing sector, “Business activity, new orders and employment level declined at faster rate while raw materials inventories declined at a slower rate.”
Some economists argue that Nigeria’s economy is in a depression, not a recession. A total collapse of the economy will lead to almost everyone losing their job.