She made this known in an interview with Arise News Channel at the ongoing World Economic Forum (WEF) in Davos.
According to Ahmed, “It is quite likely that there will be a global recession. From the reports we’ve seen from the World Bank and the International Monetary Fund (IMF) and other forecasts, there will be a global recession. How it will affect the globe, of course will be different from sub-region to sub-region. But clearly there’s going to be a decline in growth on a general basis.”
She further explained that even China was predicted to see a reduction in growth, partly because of the sustained economic impact of the COVID-19 pandemic.
“We have seen the resurgence of COVID-19 in some developed economies, especially China, but also the effect of the Russia Ukraine war that is having a global impact.
“The quantitative easing that is implemented by central banks across the world also contributes to high cost of interest, resulting in high inflation rate, which means people’s spending power is weakened as a result. So there are all indications that there will be a global recession,” Ahmed noted.
The minister said Nigeria has enough foreign reserves like it did around 2008, when it had reserves of over $60 billion, pointing out that at $34 billion, it was enough to sustain imports for six months and help the country weather the coming headwinds.
“It is true we had higher reserves during the first global recession. Our reserves are now at $34 billion. So that is still a healthy level. It means we’re able to meet at least six months of imports and other expenses into the country.
“It means we can withstand another global shock if we’re able to carry through a coordinated response between the monetary, fiscal as well as trade authorities. We have learned a lot from the experience that we went through during the COVID. And it showed that when we plan as one, we can actually withstand the shocks,” Ahmed stated.
According to the minister, the last recession in Nigeria was short-lived because of the coordinated response, which had not just government, but also the private sector contributing to the efforts, including scaling back on some categories of government spending.
