The First Securities Discount House Limited (FSDH) has raised the alarm that Nigeria may experience another recession.
Nigeria had escaped recession in 2017, just two years after the President Muhammadu Buhari government took over.
But speaking at the weekend, Head of Research at the FSDH Ayodele Akinwunmi said the country’s Gross Domestic Product (GDP) growth rate of 1.50% in the Q2 2018 was poor.
“The current low GDP growth rate is not strong enough to stimulate credit creation. It has also increased the risk of doing business in Nigeria,” he said.
“Therefore, urgent measures are required so that low GDP growth rate does not become a new norm in Nigeria.”
According to the FSDH, the slow rate of agricultural growth in the country may lead to high cost of food prices and inflation.
The second largest sector of the Nigerian economy, trade, contracted by 2.14% and entered a recession in Q2 2018.
“The weak purchasing power in the country is responsible for the contraction in the Trade sector,” the FSDH said.
“Improvement in the business environment that can lead to job creation and payment of salaries of workers, particularly among the state civil servants, will stimulate purchasing power.”