How Nigeria Can Avoid Recession – NNPC GMD

The Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said that the country can avoid recession by spending on infrastructural projects, while advocating borrowing where there are no funds.

Ninety -five percent of Nigeria’s foreign revenue comes from oil export, while the price of crude oil on Monday stood at $33.2 per barrel.
The country’s external reserves have also declined to $34.976 billion, according to a Central Bank of Nigeria data.

The Minister of Finance, Zainab Ahmed, and other experts foresee the likelihood of the country falling into recession as a result of COVID-19.

Responding to the concern, Kyari said on Monday in an interview with AIT MoneyLineWithNancy, that many countries were already having fears of slipping into recession as a result of the pandemic.

The GMD however said, “Recession is very avoidable and the way to avoid recession is to spend your way out of it.”

He said in view of the shortage of funds to finance spending, “we can borrow our way out of it.”

Kyari said the loans could be invested in assets and infrastructure that would be used to service them.

“The money will be invested in infrastructure and the items that will create jobs and tomorrow those assets and infrastructure will give you the resources that will pay back the loan.

“There are really no options when you get into situations like that than to cut your cost and borrow more so that you can fill those gaps.”

Meanwhile, Nigeria’s total debt profile was $84.053 billion (N27.4 trillion), as of December 31, 2019, a data from the Debt Management Office shows.

Exchange at N326 per dollar.