Nigeria have been hit by recession, but the presidency says there is no reason to panic as the citizens would soon have cause to be happy. Nigeria is in a deep recession The report which indicated that the country had fallen into recession was released on Wednesday, August 31, 2016, by the Nigeria Bureau of Statistics (NBC). The government agency also revealed that an estimated 4.58 million people are unemployed as shown in the second quarter of 2016.
Reacting on behalf of the presidency, Adeyemi Dipeolu, the special adviser to President Muhammadu Buhari on economic matters, listed four reasons why Nigerians should be hopeful in the face of this crisis.
Read the four reasons:
1. AGRIC AND SOLID MINERALS ‘GROWING’
The just recently released data from the National Bureau of Statistics showed that Gross Domestic Product declined by -2.06% in the second quarter of 2016 on a year-on-year basis. A close look at the data shows that this outcome was mostly due to a sharp contraction in the oil sector due to huge losses of crude oil production as a result of vandalisation (vandalism) and sabotage. However, the rest of the Q2 data is beginning to tell a different story. There was growth in the agricultural and solid minerals sectors which are the areas in which the Federal Government has placed particular priority.
Agriculture grew by 4.53% in the second quarter of 2016 as compared with 3.09% in the first quarter. The metal ores sector showed similar performance with coal mining, quarrying and other minerals also showing positive growth of over 2.5%. Notably also, the share of investments in GDP increased to its highest levels since 2010, growing to about 17% of Gross Domestic Product.
2. MANUFACTURING ‘RECOVERY’
The manufacturing sector though not yet truly out of the woods is beginning to show signs of recovery while the service sector similarly bears watching,” he said. Nevertheless, the data already shows a reduction in imports and an increase in local produced goods and services and this process will be maintained although it will start off slowly in these initial stages before picking up later.
3. INFLATION ‘FALLING’
The inflation rate remains high but the good news is that the month-on-month rate of increase has fallen continuously over the past three months, the presidential adviser said, adding though that “unemployment remains stubbornly high which is usually the case during growth slowdowns and for reasons of a structural nature.
4. IMF PREDICTIONS ALREADY ‘WRONG’
The outlook for the rest of the year is that the Nigerian economy will beat the IMF prediction of -1.8% for the full year 2016. The IMF had fore-casted a growth of -1.8% for 2016, however the economy is performing better than the IMF estimates so far. For the half year it stands at -1.23% compared to an average of -1.80% expected on average by the IMF. What is more, it is likely the second half will be better than the first half of 2016. This is because many of the challenges faced in the first half either no longer exist or have eased.