Thursday, September 7, 2017

Nigeria out of recession

Amid government celebration of Tuesday’s announcement by the National Bureau of Statistics, NBS, that Nigeria’s economy had officially exited recession, a civil society group has called for restraint and efforts geared towards a more sustainable growth.

The Minister of Budget and National Planning, Udo Udoma, said on Wednesday that the NBS’ report on the recovery of the country’s economy from recession was an indication that government’s various economic policies under the Economic Recovery and Growth Plan, ERGP, to reflate the economy was yielding fruits.

The latest NBS’ National Gross Domestic Product, GDP, Report for the Second Quarter of 2017 released on Tuesday showed the GDP grew by 0.55 per cent (year-on-year) in real terms, an indication the country’s economy was gradually pulling out of recession after five consecutive quarters of contraction since the first quarter of 2016.

The statistics agency said the GDP growth was about 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016 (–1.49 per cent) and higher by 1.46 per cent from the rate in the preceding quarter (revised to –0.91 per cent from –0.52 per cent).

On a quarterly basis, the NBS said real GDP grew by 3.23 per cent, with aggregate GDP for the period at N26.99 trillion in nominal terms, compared to N23.55 trillion in the second quarter of 2016, resulting in a Nominal GDP growth of 14.6 per cent.

“That Nigeria has exited recession is a testimony to the fact that government is moving in the right direction economically. This is a confirmation that confidence is returning to the country’s economy,” Mr. Udoma said.

Regardless, the Centre for Social Justice, CENSOJ, said there was nothing celebrate, as the reported growth was not significant enough to justify any celebration.

“In view of the less than one percent GDP growth, stating that Nigeria has come out of recession is more or less like holding onto any available straw of hope,” the group said in a review by its lead director, Eze Onyekpere.

With a population growth rate of 2.7 per cent per annum, Mr. Onyekpere said, the reported GDP growth was not significant, particularly since the country’s economy had been growing consistently by about six percent in the years before the recession.

Rather than roll out the drums for celebration, the group said the report called for a “rolling up of our sleeves for more work.”

CENSOJ said the government should focus more attention on providing increased incentives for improved production and service delivery in all sectors of the economy, while fast-tracking the ease of doing business initiatives and interventions, to boost more investment in critical sectors of the economy.

According to the group, other areas the government must pay attention include mainstreaming the local content policy at all tiers of government; rejigging the Executive Council of the Federation, FEC; and getting more experts and practical men and women to run key sectors of the economy.

Also, the group said the government should take steps to stop the ongoing industrial actions in the education and health sectors of the economy as well as ensure that the 2018 federal budget is structured to grow the economy and develop human capacity and approved as soon as possible.

In his reaction, a former Vice President, Atiku Abubakar, said Nigeria cannot be said to be out of recession until all Nigerians can have three square meals a day.

In a series of tweets, through his Twitter handle @atiku, Mr. Abubakar said, “As a Nigerian, investor and employer of labour, the news of Nigeria’s official emergence from the recession is most welcome.

“The news is surely a boost for Nigeria – it tells investors, local and foreign, that our economy is worth investing in. While we rejoice, it is also important to recognize that economic weakness at the bottom of the pyramid remains. Inflation is still high. We must continue working hard to expand economic opportunity for all Nigerians. When all Nigerians can eat three square meals, that’s when the real recession ends. We have work to do,” he said.

A former Minister of Education and lead of the ‘Bring Back our Girls Movement’, Oby Ezekwesili, in her reaction to the news expressed excitement at the report, but urged the managers of the economy to ensure the growth rate was returned to the level it fell from a few years ago.

“It is critical that our economy is officially out of recession,” Mrs. Ezekwesili said in one her tweets through her Twitter handle, @obyezeks. “Great! Next is to get growth back up to above population growth rate of 3.3%. Waste no time in trending growth rate back up to where it fell from, 5-6 per cent per annum.”

In his reaction, the Chairman of the Peoples Democratic Party, PDP, Ahmed Makarfi, also dismissed the celebration by the government on the NBS report.

He described the exit “as a mere statistic that does not reflect the reality as it affects ordinary Nigerians.”

“For any economic recovery to be meaningful, it must positively impact on the lives of the people at the lower level,” he said.

The Ekiti state governor, Ayo Fayose, through his media aide, Lere Olayinka had also toed the line yesterday when he said that the exit would only be meaningful when Nigerians can afford to eat comfortably especially when the prices of food items drop significantly.

Meanwhile, the Chief Executive Officer of the NBS, Yemi Kale, has said that the effect of Nigeria coming out of recession will not be immediately felt by the people.

Mr. Kale, the Statistician-General of the Federation, made the statement in Abuja on Wednesday at a news conference.

“There is a different stage Nigeria must go through before the masses will feel the effects of going out of recession.

“Out of recession is the first step which is very important then the country can talk of economic recovery which is going back to where Nigeria was before the recession,” he said.

The Bureau on September 5 announced that Nigeria was out of economic recession.

An economy is said to be in recession after contracting for two consecutive quarters.

The economy slipped into recession in the second quarter of 2016.

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