Nigeria’s economy could shrink as much as 8.9% in 2020 in a worst-case scenario without stimulus, Finance Minister Zainab Ahmed said on Thursday, a deeper recession than forecast after oil prices plunged due to the coronavirus pandemic.

Ahmed told Nigeria’s highest economic advisory body, the National Economic Council, that the contraction could reach 4.4% in a best-case scenario, without any fiscal measures.

But with stimulus, the contraction could be kept to just 0.59%, she said.

The pandemic and an oil price plunge have not only hit growth but also dented the state’s main source of income, creating large financing needs and weakening the naira.

“We will go into recession - but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it, come 2021,” Ahmed told the council in a virtual meeting.

She said 40% of Nigerians were poor and the crisis would increase poverty.

Ahmed said Nigeria had over 6,000 confirmed cases of the novel coronavirus, but that this could rise to almost 300,000 by the end of August. So far 200 people are confirmed to have died with the virus.

A World Bank director taking part in the meeting said the Bank was planning a package for immediate fiscal relief for Nigeria.

Ahmed said the proposal was worth $1.5 billion and intended for Nigeria’s states to provide relief at sub-national level. She said it could be disbursed by September.

Nigeria’s first quarter revenue from crude sales was 940.9 billion naira ($2.6 bln), missing its target by 31% due to the oil price crash, she said.

Ahmed said Nigeria has $72.04 million in its oil savings account as of May 21, compared to $325 million in November.

Reuters