By Rafiu Ajakaye
Nigeria has officially exited recession as the economy grew by 0.55 percent in the second quarter of the year, the National Bureau of Statistics said in a report on Tuesday.
“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,” according to the report.
“This growth is 2.04% higher than the rate recorded in the corresponding quarter of 2016 ( –1.49%) and higher by 1.46% points from rate recorded in the preceding quarter, (revised to –0.91% from –0.52%). Quarter on quarter, real GDP growth was 3.23%,” it added.
The economy plunged into its worst economic recession in the second quarter of 2016 after two consecutive contractions. The economy contracted in the first quarter by -0.67 percent, followed by -1.49 percent in the second quarter, according to official data.
The development comes as government stabilizes oil production in the restive Niger Delta region, along with a slight rise in the price of crude oil and marginal rise in key sectors of the economy.
The government had blamed the recession on falling oil prices, dip in oil production as a result of militant activities in the delta, and purported lack of savings by previous administrations.
Some experts differed with the government, blaming the crisis on a lack of coherent economic policy and arbitrary peg of the value of the local currency as it depreciated significantly against the U.S. dollar.
Atiku Samuel, an economist with the local civic group BudgIT, said the country exiting recession was not a guarantee things were exactly rosy.
“This is the time to work harder to avoid what economists call double dip recession. The challenges mitigating against economic growth are still very much there, and they include poor public finance system,” Samuel told Anadolu Agency.
“In 2016, the money the government made from oil sale was not enough to even service our debts. Nothing significant has changed this year. Nigeria still borrows to pay workers. The infrastructure remains in poor shape, the non-performing loans are still prevalent and we can’t say people are spending more. So the challenges are still there and government must work harder,” he added.
Adekanmi Ademiluyi, another economist, warned Nigeria against celebrating the new figure as the country is beset by huge economic crisis that may take over a decade of concerted efforts to resolve.
“The real issue is that getting out of a ‘recession’ is not saying anything. Very convenient for the political establishment to ignore the real issue,” Ademiluyi told Anadolu Agency.
“We are in a stagflation. This disease is famously associated with the British economy in the 1960s. The country is in this for the long haul, a result of corruption and policy mismatch over four decades,” he said.
Ademiluyi called for building the social and physical infrastructure, basic industries, and facing environmental challenges among other things.
“This requires budget discipline, planning and foresight. Those talking about a temporary recession want to go back to the bad old days of corruption, sloth and gain without pain,” he added.
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