The presidency has described news of the country wriggling out of recession as an indication that the President Muhammadu Buhari administration is working for progress and prosperity of the masses.
The National Bureau of Statistics (NBS) broke the news yesterday when it disclosed that the Nigerian Economy has finally come out of recession.
According to the Bureau, the nation’s Gross Domestic Product (GDP) gained 0.05 per cent in second quarter of 2017 (Q2 2017) after contracting for five consecutive quarters.
Special adviser to the president on media and publicity, Mr. Femi Adesina, who stated the presidency’s position on the economic recovery, noted that it was indicative of a government that absorbed the welfare and wellbeing of the citizens.
Speaking at a rally for the federal government organised by the Centre for Civil Society and Justice in Abuja yesterday, Adesina said, “You have chosen a very auspicious day for this solidarity rally. Earlier today, we were told that Nigeria had officially exited recession.
“It shows that we have a government that is working for us, we have a government that is interested in our welfare, we have a government that is interested in our well-being.
“Recession came due to some mistakes of the past and in just about a year, the government battled it and today we are officially out of recession and we give all glory to God”.
Ordinary Nigerians Will Feel the Impact – PMB
Meanwhile, an excited President Buhari yesterday in Daura, Katsina State, said the real impact of coming out recession will be better felt when ordinary Nigerians experience a change in their living conditions.
Speaking when he hosted the visiting president of Niger Republic Alhaji Mahamadou Issoufou, Buhari told journalists that, while he was “very happy’’ to hear that the country was finally out of recession, the real gain should be improved conditions for Nigerians.
Responding to questions from journalists, the President said, “Certainly, I should be happy for what it is worth. I am looking forward to ensuring that the ordinary Nigerian feels the impact”.
Buhari commended managers of the country’s economy for their hard work and commitment, stressing that more work needs to be done to improve the growth rate.
“Until coming out of recession translates into meaningful improvement in peoples’ lives, our work cannot be said to be done”, he said.
In his remarks, the Nigerien president said he was most delighted to see President Buhari in good health and prayed that the almighty God would continue to strengthen him.
Issoufou said he used the opportunity of the visit to discuss some bilateral and regional issues with President Buhari, including the fight against Boko Haram, the economic challenges in the Lake Chad Basin and other developmental concerns that directly affect the livelihood of the citizens of both countries.
The Nigerien president was accompanied on the visit by a former Prime Minister, Dr.Hamid Algabid, and the president of the Economic, Social and Cultural Council of Niger, Moussa Moumouni Djermakoye.
We’re Still Worried Over Unemployment, Rising Food Prices – Senate
But the Senate yesterday called on the executive arm of government to adopt the needed measures to curtail the rising wave of unemployment and food prices in order to stem the high cost of living in the country as a matter of urgent necessity.
While applauding the report by the NBS that Nigeria’s economy has finally staged a comeback, the Red Chamber urged the federal government to put in place such measures as retooling agriculture, access to credit to promote more opportunities for small business owners to combat the two serious economic debacles.
In a statement signed by its spokesperson and chairman of the Senate Committee on media and public affairs, Senator Aliyu Sabi Abdullahi, the Senate emphasized that it was truly commendable that after five consecutive quarters of contraction, the Nigerian economy grew by 0.55% in the second quarter of 2017.
Abdullahi noted that although the nation is now out of recession, the Senate remains committed to seeing that the unemployment rate and high cost of living in the country is brought down.
His words: “The rising unemployment in the country is an issue that is of much concern to all of us. Additionally, the rising cost of food prices and basic services in the country still affects millions of households.
“This is why we will continue to work on our laws, specifically in the areas of access to credit to promote more opportunities for small business owners; and opening up more sectors to private sector participation, so that there will be more competition in our markets — which will lead to lower prices.”
Abdullahi noted further that the improved performance of the trade, manufacturing, agriculture and oil sectors was an indication that with carefully aligned policy and legislative interventions, Nigeria’s economy could thrive beyond current forecasts and expectations.
He stated: “The Senate received Q2 NBS economic report with great excitement,” adding “We are delighted that government’s response to the economic recession has begun to yield tangible results.
“The public will recall that in the days following the announcement of the 2016 recession, the Senate initiated steps and tabled 21 recommendations that it submitted to the executive for immediate action. We also listed out economic priority Bills, many of which have now been passed, or at the final stage.
“We are also happy to note that many of the economic recommendations, specifically in the areas of retooling our agriculture and trade policies were adopted. This shows that the ‘all hands on deck’ approach was necessary from both branches of government”.
Also, Speaker of the House of Representatives, Yakubu Dogara, expressed happiness over the latest report released by the NBS, indicating that Nigeria has finally exited recession.
In a statement issued by his special adviser on media and public affairs, Turaki Hassan, the Speaker said the House of Representatives is gladdened by the goodness of the performance of the economy in the last quarter.
He said this positive result is an indication that the economic policies of the APC administration are on track and that the task ahead is sustained efforts by both the executive and the legislature in fast tracking program implementation for even more rapid economic growth and development.
“We must now channel our energies towards measured aimed at job creation for the millions of our people, address the widening socio-economic inequalities and creating opportunities for all Nigerians”, he added.
Oil, Agric, Manufacturing, Trade Sectors Record Improved Performances
According to NBS report on ‘Nigerian Gross Domestic Product (GDP) released yesterday, the Q2 2017 growth rate of 0.55 per cent (year-on-year) was 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016 (-1.49per cent) and higher by 1.46 per cent points from rate recorded in the preceding quarter, which was revised to –0.91 per cent from –0.52per cent due to revisions to crude output for March 2017.
The report by NBS disclosed that Nigeria’s economy getting out of recession was driven principally by the performance of four main economic activities comprising oil sector, agriculture sector, manufacturing sector and trade.
The results stated that Oil GDP recovered significantly from -11.63 per cent in Q2 2016 and -15.40 per cent in Q1 2017 to 1.64 per cent in Q2 2017.
But while Oil GDP expanded considerably in the second quarter of 2017, Non-oil GDP only grew at 0.45 per cent, down from 0.72 per cent in the preceding quarter and -0.38 in the corresponding period in 2016.
It also showed that agriculture continued its strong and positive growth, which it had maintained throughout the recession, growing by 3.01 per cent in Q2 2017, from 3.39 per cent in Q1 2017 and 4.53 per cent in Q2 2016.
Manufacturing retained its positive growth for the second consecutive quarter in Q2 2017, growing at 0.64 per cent compared to 1.36 per cent in Q1 2017 and -3.36 per cent in Q2 2016, while trade which has a dominant share of GDP remained negative at -1.62 per cent, but the contraction in the sector decelerated from the -3.08 per cent recorded in Q1 2017.
The bureau report hinted that electricity, gas and financial institutions sectors also recorded strong growths, with electricity and gas growing by 35.5 per cent, compared to -5.04 per cent in Q1 2017 and -10.46 per cent in Q2 2016 and financial institutions growing by 11.78 per cent in Q2 2017, compared to 0.60 per cent in Q1 2017 and -13.24 per cent in Q2 2016.
The results also showed that the industry sector grew positively by 1.45 per cent in Q2 2017, after nine consecutive quarters of negative growth since Q4 2014.
The report noted: “As a percentage of GDP, services retained the giant share of GDP at 53.73 per cent in Q2 2017, down by 1.94 per cent points (55.67 per cent) from the first quarter of 2017 and 54.80 per cent in Q2 2016; industries accounted for 23.31 per cent of GDP, compared to 22.90 recorded in Q1 2017 and 22.65 per cent in Q1 2016; while agriculture accounted for 22.97 per cent of GDP in the quarter under review, compared to 21.43 per cent in Q1 2017 and 22.55 per cent in Q2 2016.
“Foreign trade has also contributed to improving economic conditions with exports amounting to N3.1 trillion in Q2 2017 while imports which increased by 13.5per cent amounted to N2.5 trillion in the same period. The overall trade balance thus remained positive at N0.60 trillion”.
The nation’s economy of recent has benefited from the stability in global price and stability in oil production following federal government’s negotiations with the Niger-Delta militants.
The stability in global oil prices has aided Central Bank of Nigeria (CBN) in the intervention in the foreign exchange, while the external reserves are on high at $31.8billion as at August 29, 2017.
The economic adviser to the president, Dr. Adeyemi Dipeolu, has said that the end of the recession is welcome but economic growth remains fragile and vulnerable to exogenous shocks.
He pointed out that the federal government will intensify its efforts going forward on the implementation of the Economic Recovery and Growth Plan 2017-2020 (ERGP) that is designed to achieve sustained economic growth and diversification of the nation’s economy.
In a statement he issued yesterday, Dipeolu said, “Unemployment however remains relatively high but job creation is expected to improve as businesses and employers increasingly respond more positively to the significantly improving business environment and favorable economic outlook.
“Besides, as key sectoral reforms in both oil and non-oil sectors gain traction, the successful implementation of ERGP initiatives such as N-Power and the social housing scheme will boost job creation.
“Food inflation also bears watching as it has remained quite high and volatile due mostly to high transport costs and seasonal factors such as the planting season. Investments in road and rail infrastructures, increased supply and availability of fertilizers and improvements in the business environment should contribute to the easing of food prices.
“Overall, the end of the recession is welcome but economic growth remains fragile and vulnerable to exogenous shocks or policy slippages”.
Experts Outline Ways For More Robust Growth
Meanwhile, economic experts have suggested ways of achieving more robust growth in the nation’s economy.
Speaking with LEADERSHIP yesterday, an Economist, Prof. Uche Uwaleke, said exiting recession is a welcome development but federal government must diversify the economy and improve on its tax generation going forward.
He said, “The growth in GDP is cheering news because for five consecutive quarters, Nigeria’s GDP has been at negative tertiary. Now that we are technically out of recession, it will boost confidence in the nation’s economy.
“A number of foreign investors are interested in what is happening in the country and a further decline in GDP will damage their moral of investing the Nigeria’s economy.
“Federal government needs to work on diversification of the economy so that we don’t over depend on Oil and Gas sector. The government must sustain its policies in agriculture sector and CBN’s must sustain its foreign exchange intervention”.
Also, the Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said federal government must sustained oil production and grow non-sector.
He urged government to invest in infrastructure and reduce interest rate to the real sector of the nation’s economy.
A renowned economic expert, Ayo Teriba, while speaking with our correspondent on the NBS report yesterday said, “This recovery is the result of improvement in oil price and oil production. If any of the two falls, we will be back to square zero. The recovery is dependent on the oil price staying where it is, and the oil production also staying where it is or even getting better. So, it rests squarely on sustenance of oil sector activities.
“If you wanted to be sure of the recovery that is sustainable regardless of what happens to oil, then, Nigeria has to do a bit of what Saudi Arabia is doing. They are in the same situation with Nigeria. And they know that oil is very reliable for growth and stability. In May, they announced the privatization of about 16 of their sectors, which they believe will give them 200 billion U.S Dollars.
“For you to be sure that the recovery will be sustained and your growth will be steady, Nigeria also needs to open up to foreign investment and build up foreign exchange buffers. Then, the economy will not be dependent on whether the oil price is low or high or whether the oil production is low or not”.
On his part, Chief Responsibility Officer of Value Investing Limited, Seye Adetunmbi said while the development is a good news, it is “not yet uhuru”.
Adetunmbi said it is good news because it will give people psychological relief that Nigeria is no longer in recession and perhaps give people some rays of hope that things are looking up.
He however said, “It is not yet uhuru because it has not translated to more employment opportunities nor reduced the level of unemployment in Nigeria. The problems of inflation, high cost of living and standard of living are still with us to mention a few.
Asked what lessons should be learnt from the development, the economic expert noted that being out of recession shows a recorded growth in some economic indicators consistently for the past successive periods under review as computed by the NBS.
“By implication, for as long as the economic indicators don’t add up through fiscal indiscipline and without deliberate efforts to grow the economy consistently, the good news can be reversed”, he added.
In his comments, Dr Diran Fawibe, Chairman/CEO of International Energy Services (IES) Ltd, said the contribution of the oil and gas sector to the economy has been significant and over time has been the major source of foreign exchange revenue to government.
Fawibe noted that Nigeria’s petroleum industry which is the largest in Africa with proven Oil and Gas reserves of 37 billion barrels (bbl) and 192 trillion cubic feet respectively and contributing about 10 per cent to the country’s Gross Domestic Product also accounting for 95 per cent of all exports, if well managed, will rapidly balanced the economy.
According to him, the stability in the sector over the past one year when the country entered into recession provided the needed income that has enable government meet some of its obligations.
“We see some positive trends happening in the industry as there was relative peace in the Niger Delta region. That stability helped in boosting local production which figures put at an average of 2 million barrels a day as against 1 million barrels a day at the early stage of the recession”, he stated.
Also, in his contribution, Mr. Adedayo Ojo, an energy analyst and acting managing director and CEO of Proxima Energy said the stability in the exchange rate occasioned by government earnings from improved oil production boosted investors’ confidence.
Ojo also noted that restoration of major and key oil installations in the Niger Delta helped to boost oil production and in turn lifted overall government earnings, even as he said the bringing back to full functionality of the Forcados export facility boosted export potential in the sector.
The director-general of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf said, “This is a good development for the country. It has a positive signaling effect and it will also have a positive effect on the perception of the economy especially by foreign investors as this will boost the country’s image.”
Also, the managing director of Highcap Securities Limited, Mr. David Adnori said, “This is a positive development although we have anticipated it, it is a welcome development.”
He however noted that the only challenge is the inflation rate still in double digit, saying government needs to work on the inflation rate should come to single digit.
An economist analyst and a stockbroker, Tunde Oyediran, stated that the NBS’ data showed that there is improved performances in agricultural and manufacturing sector in the second quarter.
“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 noted.
In a release sent to media yesterday by the senior special assistant to the president on media and publicity, Laolu Akande said, “Buhari administration welcomes news of Nigeria’s exit from recession with cautious optimism and will continue to drive Nigeria’s economic growth by vigorously implementing the Economic Recovery and Growth Plan launched earlier this year by President Muhammadu Buhari.”