NESG worries about likely recession and social unrest
The Nigerian Economic Summit Group (NESG) has expressed fear of economic recession and social unrest as possible consequences of Nigeria’s current low economic growth, which is manifested in soaring inflation and unemployment.
Chief Economist and Director of Research and Development at NESG, Dr. Olusegun Omisakin expressed concern when he remarked that returning inflationary pressures and declining purchasing power are affecting the Nigerian economy and that ” low growth combined with inflation and unemployment can lead to recession and social crisis”. trouble.”
Omisakin made the remarks at an event organized ahead of the 28th Nigerian Economic Summit (#NES28) by NESG and the Federal Ministry of Finance, Budget and National Planning on the theme “Key Drivers of Economic Prosperity: a critical look at entrepreneurship policies”.
Omisakin said access to credit and an unconducive business environment impact production capacity and commodity prices and contribute to inflationary trends; noting that the relationship between oil prices and trade surplus shows that 79% of Nigeria’s total exports are crude oil, but the country has failed to use it to its advantage, resulting in a decline in foreign direct investment (FDI).
Omisakin said there was a need for the Nigerian oil sector to perform well given that the growing non-oil sector is not contributing to job creation.
In her welcome address, NESG Board Director Ms. Wonu Adetayo said “As Nigeria looks to welcome a new government, economic growth should be a frontline issue and an area of focus. immediate interest, given that entrepreneurship is a key driver of the economy.
“To implement policies and interventions, entrepreneurship policies need to be addressed, including the resulting gaps, and this event will review key policies around thematic areas to promote access to finance.”
Adetayo said the Nigerian entrepreneurship system continues to struggle with the pandemic-induced recession and the current macroeconomic issues in the Nigerian economy. She also said that access to finance and poor business environment in Nigeria exacerbate problems in the economy. “Even though the Nigerian economy continues to show resilience, many MSMEs continue to struggle with the impact of the challenges,” she said.
The 2021 Nigeria MSME Survey showed a 4.5% decline in MSME growth, indicating a drop from 41.5 million recorded in 2018 to 39.6 million in 2021, mainly due to the impact the pandemic; which means that 1.9 million MSMEs disappeared.
The Minister of State, Federal Ministry of Trade and Investment, Mariam Katagum, who was represented by the Director for Business and Promotion, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr. Sunday Ewans said the major policies address key areas that affect small businesses.
She noted that micro-enterprises make up the majority of the 39.6 million MSMEs in Nigeria, accounting for over 95% of all MSMEs. Furthermore, she revealed that in a 2020 MSME Impact Assessment survey, small businesses said they lacked adequate access to affordable finance, skills and access to technology. market.
On his part, the Managing Director/CEO of the Development Bank of Nigeria (DBN), Mr. Tony Okpanachi, said that the DBN provides technical assistance to financial institutions, partial credit guarantees and capacity development for MSMEs. He noted the existence of a financing gap in the sector which affects the availability of finance for MSMEs.