The Central Bank of Nigeria has called on all employers of labour to help curtail the current economic woes in the country by creating jobs for the teaming youths among others.
The Central Bank of Nigeria, CBN stated this yesterday in a communique issued and announced by the CBN Governor, Godwin Emefiele at the end of the two days meeting held on Monday/Tuesday by the Monetary Policy Committee, MPC in Abuja.
MPC is CBN highest policy making body comprising of five CBN staff, five professors from selected Nigerian universities and the permanent secretary, Federal Ministry of Finance; mandated by law to meet every quarter to review economic situation in the country.
CBN noted that the current insecurity in the country especially youth restiveness occasioned by the #Endsars protest can further weaken the country’s economy and erase the chances of taking Nigeria out of recession by the end of December, 2020.
The meeting attended by ten members of the MPC including the CBN Governor, Godwin Emefiele observed that despite the corona virus pandemic, the United States of America continued to create employment for its residents for the development of its economy.
“The US economy has, however,
maintained a steady pace of job creation, even though infection
rates and total fatality continue to rise in that country”, CBN stated in the communique.
CBN however noted that in Nigeria, weakness in crude oil prices, soaring global debt and high unemployment persist.
“In the domestic environment, the Nigerian economy slid into recession in the third quarter of 2020, following a second consecutive quarter of contraction in output.
“The third quarter contraction was, however, milder than the previous
quarter. The Committee appraised the developments in both the
global and domestic economies, as well as the outlook for the rest
of the year and the first quarter of 2021.
“The global economy witnessed a better-than-expected recovery in the second quarter of 2020”, said CBN
While in Nigeria, “Data from the National Bureau of Statistics (NBS) showed that real Gross Domestic Product (GDP) contracted by -3.62 per cent in Q3 2020, compared with -6.10 and 2.28 per cent in the previous quarter and corresponding period of 2019, respectively, thereby pushing
the economy into recession.
“The oil sector contracted further by –
13.89 per cent in Q3 2020 from -6.63 per cent in the previous quarter,
while the non-oil sector contracted by -2.51 per cent in Q3 2020, compared with -6.05 per cent in the preceding quarter.
“The persisting weak performance was mainly attributed to the lull in
economic activities associated with the low price in the oil market
as well as the lingering effects of the Coronavirus Pandemic.
“The Committee, however, noted the likely downside risk [due] to growth of the recent unrest in the country, warning that this may adversely impact economic recovery in the near term.
“The Committee noted with concern that inflation has been on the rise for the fourteenth consecutive month, as headline inflation (year-on-year) moved up to 14.23 per cent in October 2020 from 13.71 per cent in September 2020.
“This was attributed to the increase in both food and core inflation, which rose to 17.38 and 11.14 per cent in October 2020 from 16.66 and 10.58 per cent in September 2020, respectively.
“The continued increase in food and
core inflation was attributed to the persistence of insecurity across the country as well as lingering structural deficiencies impacting the logistics of moving food items to urban areas such as poor road networks, unstable power supply and a host of other infrastructural deficiencies.
“Other factors include the persisting impact of coronavirus-induced supply disruptions, recent hikes in the price of energy products (PMS and electricity) and weak crude oil prices.
“The MPC, therefore, emphasized the need to address structural supply side
issues putting upward pressure on costs of production and unemployment.
“It thus, urged the Federal Government to maintain its initiatives targeted at reducing
unemployment, particularly amongst the youths, citing the recent EndSARS protests and ensuing agitation by hoodlums as potentially disruptive to output growth in Nigeria.
“To this end, the MPC reiterated its support for the various development finance initiatives of the CBN to stimulate production and reduce unemployment.
“MPC further encouraged the Bank to intensify its efforts by increasing funding to more beneficiaries so as to boost consumer spending and accelerate recovery from recession”.
The MPC urged the bank to ensure “continued credit support to employment-stimulating sectors to hasten the recovery of output growth and improve employment particularly among the youths.