There have been mixed reactions trailing the report by the National Bureau of Statistics, (NBS) that the Nigerian economy has officially exited its worst recession in 25 years.
The NBS had announced that the Nigerian economy finally came out of recession after recording five consecutive quarters of contraction, with the GDP recording a growth rate of 0.55 per cent in the second quarter as against the -0.91 revised rate recorded in the first quarter of 2017.
While some Nigerians believe that the report was a pointer to the fact that the Federal Government was working hard to improve the economy, others however disagreed, saying the verdict should not only be on paper, but should be seen positively in the lives of the people as the prices of products were still out of the reach of ordinary Nigerians.
While fielding questions from reporters shortly after receiving the President of Niger, Alhaji Mahamadou Issoufou in Daura, Buhari said until the country’s exit from recession could translate into meaningful improvement in peoples’ lives, “our work cannot be said to be done.”
According to a statement by the President’s Senior Special Assistant on Media and Publicity, Garba Shehu, Buhari expressed optimism that Nigerians would soon experience a change in their living conditions.
“Certainly, I should be happy for what it is worth. I am looking forward to ensuring that the ordinary Nigerian feels the impact,” Buhari stated.
He commended all the managers of the economy for their hard work and commitment, stressing that more work needed 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,” the President said.
The Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu has attributed Nigeria’s exit from economic recession to the slight improvement in oil prices.
In a statement, Dipeolu said that despite the exit from recession, “the nation’s economic growth remained fragile and vulnerable to policy slippages.”
He noted that the oil sector grew by 1.64 per cent compared to -15.60 in the first quarter of the year, reflecting an increase of up to 17 percentage points.
Dipeolu assured Nigerians that the current administration would intensify efforts to actualise the nation’s Economic Recovery and Growth Plan (ERGP).
“This improvement is partly due to the fact that oil prices, which have improved slightly from the lows of last year, have been relatively steady, as well as the fact that production levels were being restored.
“The GDP figures give grounds for cautious optimism, especially as inflation has continued to fall from 18.72 per cent in January 2017 to 16.05 per cent in July 2017. Foreign exchange reserves have similarly improved from a low of $24.53 in September 2016 to about $31bn in August 2017. In the same vein, capital importation grew by 95 per cent year-on-year, driven by portfolio and other investments, but also notably by foreign direct investment, which increased by almost 30 per cent over the previous quarter.
“Foreign trade has also contributed to improving economic conditions, with exports amounting to N3.1tn in Q2 2017, while imports, which increased by 13.5 per cent, amounted to N2.5tn in the same period. The overall trade balance thus remained positive at N0.60tn.
“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 favourable economic outlook.”
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The Director General of the Abuja Chamber of Commerce and Industry, Chijioke Ekechukwu has said that there are clear signs that the country was already out of recession even before the apex statistical body in the country announced it.
According to Ekechukwu, the Purchasing Manager’s Index is already above 50, an indication that manufacturing sector is growing well.
“With this, you just know that the economy is driving itself, especially through the real sector and the small and medium enterprises. Prices of Goods and services are gradually getting down,” he said.
He further said there is enough stability in the foreign exchange market unlike before, a development that is also stabilising prices of goods and services.
He said agricultural activities are increasing and people are beginning to have confidence in locally grown food, an indication that the GDP is getting better.
But the General Secretary of the Nigeria Labour Congress, Dr. Peter Ozo-Eson has said that despite the country’s exit from recession, there has been no visible improvement in the standard of living, salaries, rate of employment and quality of life of Nigerian workers.
However, he said the positive Gross Domestic Product growth in the second quarter was commendable, adding that if the upward trend was sustained in subsequent quarters, the impact on the livelihood of Nigerians and workers would be felt.
Reactions from a cross section of Nigerians also showed that there had been no significant improvement in the prices of consumer products, as the economic rationing of sizes of some manufactured food items remained the same.
The Chairman of the Peoples Democratic Party’s Caretaker Committee, Senator Ahmed Makarfi, has described the news of the exit as mere statistics, which did 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 stated.
Some economic experts and analysts have however, welcomed the news but expressed concerns that the economic growth rate was weak and largely dependent on improvement in oil prices and output, and as such, might not be sustainable in the event of a shock in the local or global oil market.
They warned that the growth was fragile and that the nation could slip back into recession if the price of crude suffered a dramatic decline.
The experts said policymakers still had a lot to do to keep the economy out of recession and experience higher economic growth rate that could guarantee better living conditions and standards.
They further advised policymakers to take steps that would make the country’s economic growth and recovery to be based on factors that were not dependent on the oil sector.