The Purchasing Managers Index revealed that the Nigerian economy contracted in May, according to data obtained from the Central Bank of Nigeria on Thursday.
The personal statements of some members of the Monetary Policy Committee indicated that the PMIs for the manufacturing and non-manufacturing sectors contracted in May.
“Manufacturing and non-manufacturing PMIs contracted in May 2021, despite growth of the manufacturing sector in Q1:2021, points to the possibility of the buildup in the inventory of finished goods, as a result of low purchasing power,” an MPC member, Folashodun Shonubi, said.
Shonubi, who is the deputy governor, operations directorate at CBN, Mr Folashodun Shonubi, advocated for a widening of the scope and coverage of the development finance interventions, targeted at household and small businesses to address the challenge of low aggregate demand and encourage further productivity.
He said, “The increasing need to refocus the economy and look beyond oil stares us in the face, as many jurisdictions scale down further investments involving use of fossil fuel.
“Interestingly, the speed and source of our recovery underscored the fact that recent economic downturn was strictly on account of external shock and not due to a weakness in domestic macroeconomic fundamentals.”
He said the country must therefore take more steps to enhance domestic investment and productivity, as well as reinforce the internal stabilisers of the economy.