The possibility of the Nigerian economy plunging into recession in 2016 is not in doubt, going by the poor economic policy direction of President Muhammadu Buhari. Professor Pat Utomi has maintained.
As crude oil prices dive lower, threatening to dip below $30 a barrel for the first time since the financial crisis of 2008, commodity economies around the world are catching a cold.
The collapse of oil price is already taking its toll on the Nigerian economy. As it stands, there is no light at the end of the tunnel yet. Nigeria’s situation is further worsened by the current government’s delay in enacting sound fiscal and monetary policies.
Investors across the world are losing their investments in stock and property owners are also suffering losses as a result of depreciation in currencies.
The Naira is currently under intense pressure, the situation has depleted Nigeria’s foreign exchange reserves, with policy makers now left with a difficult decision to make: either allow the currency to move in a wider range against the dollar or raise interest rates.
However, the Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele has promised to stabilize the Naira without devaluing the currency.
President Muhammadu Buhari has also backed the CBN’s monetary policies, which have raised questions about its sustainability.
Two former Central bank governors, have disapproved the current policies initiated under Buhari, aimed at ameliorating the situation. They have both called for more flexibility in the management of the country’s currency.