Policy Brief & Alerts

May 17, 2017

Understanding The Ongoing Recession In Nigeria:A Synthesis Of The Events And Policy Options

In
the second quarter of 2016, the Nigerian economy witnessed its first recession
in twenty years due to the interplay of several external and internal factors.
The recession has continued until date and has given rise to relentless
unemployment rate and job losses, double digit and soaring inflation, currency
depreciation and widening gap between parallel market and official exchange
rates, amongst other adverse effect on individuals and firms in the country.
Thus, there is a need to take a deeper look into the nature of the present
recession as well as the impact of monetary and fiscal policy responses thus
far, in order to shed light on the way forward towards tackling the recession
and ensuring sustainable economic growth. This paper analyses the ongoing
recession in the Nigerian economy to provide insights into the interplay of
events and recommendations for policy.

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Related

 

Nigeria Economic Update (Issue 39)

The monthly monetary survey by the CBN shows a decline in money supply for the month of August 2017, relative to July 2017. Narrow and broad money supply dropped by 4.2% and 1.5% to N9,891 billion and N21,851 billion respectively. The continuous monetary contraction witnessed over the past months may be associated with aggressive sale of treasury bills by the CBN through open market operations. This act is capable of mopping up liquidity in the economy, reduce loanable funds in the banking system, and constrain the easing of lending rates in the near term.