The Oasis Reporters
September 6, 2017
Nigeria’s economic recovery was given impetus by an improved performance in the oil sector, agriculture, manufacturing and trade according to a report released Tuesday by the National Bureau of Statistics (NBS).
It said Nigeria just exited its worst economic recession in more than two decades, notching up growth of 0.55 per cent in the second quarter of 2017.
The economy had previously contracted for five consecutive quarters since the first quarter of 2016, seven months after President Muhammadu Buhari took control of political power from former President Goodluck Jonathan.
It peaked into full blown recession for the first time in more than two decades in August 2016.
“In the second quarter of 2017, the nation’s Gross Domestic Product (GDP) grew by 0.55% (year-on-year) in real terms, indicating the emergence of the economy from recession after five consecutive quarters of contraction since Q1 2016,” it said.
Nigeria, which depends on oil sector for 70 per cent of state revenues and 90 per cent of export earnings, has been battered by lower oil prices since mid-2014, which have slashed government revenues, weakened the currency and caused dollar shortages, frustrating business and households.
The nation’s economic woes were exacerbated by militant attacks on key oil infrastructure in the restive Niger delta, slashing output.
Economy watchers also blamed President Buhari for his poor handling of the foreign exchange regime when he mopped up private foreign accounts of private citizens in exchange for naira at the official level. Remittances from abroad simply dried up in anger.
Former President Jonathan had allowed a free flow of foreign exchange to keep it coming.
By the time the Buhari policy was reversed, the damage had already been done.
President Muhammadu Buhari, who took office in May 2015 on an anti-corruption platform is currently grappling with separatist agitation in the country’s southeast, farmer-herders clashes in the central belt , Boko Haram insurgency in the northeast and kidnappings and militancy in the south with flash points in Kaduna State in the north that has seen a rash of kidnappings.
Analysts said the outlook for more growth looks positive for Nigeria.
“You can see that there have been improved performances in non-oil sectors in the second quarter,” said Bismark Rewane of the Lagos-based Financial Derivatives Company.
“The prospects for more robust growth are bright. I hope the current economic diversification efforts which see efforts being given to agriculture and mining will be sustained,” he said.
He said the nation’s economy would also buoy if ongoing truce with Niger delta militants was intensified.
“If there are no attacks on oil facilities and production is increased and Nigeria earns more money, then the economy will stabilise.”
Nigeria’s oil output has ramped up to an average of two million barrels per day from a low of 1.3 million in 2016 following government peace talks with the oil rebels.
Meanwhile, Senator Ahmed Makarfi, the PDP chairman (N. C. Cwho is a former governor of Kaduna State has said that “statistics may not represent reality” following Tuesday report by the National Bureau of Statistics (NBS) that the nation has exited the economic recession that worsened living conditions in the past two years.
Chairman, National Caretaker Committee of the PDP, Senator Ahmed Makarfi said it is the wish of every Nigerian for the country to overcome the current hardship.
“PDP is not praying for the country to be in recession. Statistics may indicate one thing, but reality is different,” he said.
Makarfi’s position is not out of tune with that of millions of Nigerians struggling to eke out a living in the past few years following the crash in the price of crude oil in the international market.
President Buhari has also said that exit from recession is nice if felt by ordinary Nigerians.
A social media commentator, Foluke Martins says however that “there are certain indices which must be in place if truly we are out of recession”.
According to her, “there must be increase in stock market activities and prices must firm up while the Nigerian naira must have gained strength over a period of time”.
She added that “a visible drop in unemployment figures must be noticed especially within the financial and manufacturing sectors with job security remaining a predominant factor in getting out of recession”.
“Increase in mortgage activities with more homeowners should be another factor etc, but the reverse is the case now”.
“Interest rates and inflation are still intolerably high, with decreased purchasing power of Nigerians corporate profits are rapidly evaporating”, she concluded.