Nigeria slowly slid into recession in the first quarter of 2016 and has contracted for five consecutive quarters, until the second quarter of 2017 when the Nigerian economy finally exited the recession with a 0.55% GDP growth. Data on the country’s gross domestic product (GDP) growth rate released by the National Bureau of Statistics (NBS) has shown that the economy grew at 0.55 per cent in the second quarter (Q2) of 2017.
Explaining the mechanism of recession, The Statistician-General of the Federation and Chief Executive, National Bureau of Statistics, Dr. Yemi Kale, stated “Recession is not about the price of your goods, not whether unemployment is going up or down, not whether you have quality education, it’s purely your Gross Domestic Product; your outputs of goods and services in the economy are going down. GDP also, is an accumulation of 46 different economic activities in Nigeria and the overall number, whether positive or negative, will determine whether you are in recession or out of recession.
Nigeria’s Gross Domestic Product (GDP) grew by 0.55% (year-on-year) indicating the emergence of the economy from recession. 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%. During the quarter, aggregate GDP stood at N26,986,005.20million in nominal terms, compared to N23,547,466.91 million in Q2 2016, resulting in a Nominal GDP growth of 14.60%.
For a population growth rate of 2.7% per annum the less than 1% reported GDP growth was not significant, particularly since the country’s economy had been growing consistently by about six percent in the years before the recession. The NBS boss explained that out of the 42 economic activities that were used to measure the GDP growth rate, 21 recorded decline in productivity, while the rest performed better than they did in the first quarter.
As good as the news of the recession exit sounds, Nigerians are yet to feel the impact of the exit from recession because of the structure of the economy, which is still largely driven by oil. Most persons describe the exit as mere statistics because it does not reflect the reality that affects ordinary Nigerians since inflation is still high and the cost of things have remained as they were when Nigerians were in recession.
It takes more than figures to exit.
Prominent politicians like Nigeria’s former Vice president Atiku Abubakar and a serving senator have recently raised concerns and expressed doubts about the news of the recession exit.
Senator Shehu Sani in a series of tweets expressed that it takes more than figures to leave recession. In his tweet he stated that there are three ways to get out of recession; by figures,by facts,by facts and figures, noting that the best people to confirm if Nigeria is really out of recession are the people who bear the effects of recession in their daily lives.
The former vice president Atiku Abubakar, said Nigeria cannot be said to be out of recession until all Nigerians can have three square meals a day. “For any economic recovery to be meaningful, it must positively impact on the lives of the people at the lower level,”.
In other to ensure we remain out of recession and the impact is felt by citizens, the Centre for Social Justice, CENSOJ said the government should focus more attention on providing increased incentives for improved production and service delivery in all sectors of the economy, while fast-tracking the ease of doing business initiatives and interventions, to boost more investment in critical sectors of the economy.
In view of this CENSOJ urged the government should take steps to stop the ongoing industrial actions in the education and health sectors of the economy as well as ensure that the 2018 federal budget is structured to grow the economy and develop human capacity and approved as soon as possible.