London (Precise Post)-The present recession in the United Kingdom will have a negative effect on bilateral trade between Nigeria and the UK as both countries will count their losses during the period.
Nigerian Country Director, Nigerian London Business Forum, Prof Chris Onalo, revealed this in a telephone interview with Punch correspondent on Wednesday.
The forum, headquartered in London, boosts bilateral relationship between Nigeria and UK in support of other bilateral agencies set up by the two countries’ governments.
The UK officially entered into recession after the coronavirus pandemic dragged the economy into contraction by a record 20.4 per cent between April and June, the Office for National Statistics said on Wednesday.
The ONS confirmed the second quarter contraction, the worst in western Europe.
With this, the UK’s nosedived into recession after a 2.2 per cent fall in the first three months of 2020, according to www.walesonline.co.uk.
A recession is defined as two successive quarters of decline in Gross Domestic Product, which has not been seen in the UK since 2008 and 2009 during the financial crisis.
The ONS data showed that around 730,000 UK workers had been removed from the payrolls of British companies since March when the coronavirus lockdown began.
Employment also dropped by the largest amount in a quarter since 2009 between May and June.
Onalo said, “The economic recession currently going on in UK will definitely have a spillover effect on Nigeria in terms of lockdown in investment exchange, getting goods which Nigerians normally buy from the UK not being produced at maximum capacity down in UK for export purposes.
“So, if the export drive of the UK nosedives; obviously, they will have less to sell to the international market.
“And given that Nigeria is not yet a production economy but a largely import economy, those things that Nigeria normally buys from the UK and for reasons of low production of such things in UK obviously will affect the Nigerian economy.”
He noted that the recession in the UK affected education and industries as universities were not able to get students that they would have loved to compared to what used to be the success rate they had previously.
“And that again is a tremendous impact on Nigeria too because Nigerians are looking to go to the UK to acquire quality education too but they are not able,” he said.
He added, “The Nigeria-London Business Forum is also affected. We ought to have had UK-Nigeria agric summit last June but that could not happen.
“We thought we could move investments into agric sector in Nigeria from UK but that was halted because of the lockdown.”
However, the Director-General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf, said the UK recession was not likely to have any significant impact on the Nigerian economy.
He said, “The UK recession is the outcome of the consequential global shocks resulting from COVID-19.
“The shocks have impacted different economies to different degrees. The vulnerabilities of economies also vary.
“The Nigerian economic condition is unlikely to get worse on account of the recession in UK.”
The global economic condition is more critical at this time, he added.