Economy Will Perform Better Despite Drop In GDP – Presidency

-Presidency has allayed the fears that
the sharp drop in the Gross Domestic Product,
GDP of the country which has plunged the
country into economic recession presently
would not persist.
Recall that the National Bureau of Statistics,
NBS, on Wednesday released the GDP figures
for the second quarter of 2016 with the GDP
growth rate sliding further from -0.36 per cent
in the first quarter to -2.06 per cent year-on-
year.
But in a statement by Mr. Laolu Akande, the
spokesperson of the Vice President, Yemi
Osinbajo, the presidency stated that it “will
continue to work diligently on the economy
and engage with all stakeholders to ensure
that beneficial policy initiatives are actively
pursued and the dividends delivered to the
Nigerian people.”
It quoted the Special Adviser to the President
on Economic Matters, Dr. Adeyemi Dipeolu on
saying that even though the latest NBS report
painted a gloomy picture, “the rest of the Q2
data is beginning to tell a different story.”
The statement read thus: “The just released
GDP figures for the 2016 second quarter by
the National Bureau of Statistics while
confirming a temporary decline, has also
indicated an hopeful expectation in the
country’s economic trajectory.
“Besides the growth recorded in the agriculture
and solid mineral sectors, the Nigerian
economy in response to the policies of the
Buhari presidency is also doing better than
what the IMF had estimated with clear
indications that the second half of the year
would be even much better.
“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 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.
“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.
“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.
“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.
“Unemployment remains stubbornly high
which is usually the case during growth
slowdowns and for reasons of a structural
nature.
“The picture that emerges, barring unforeseen
shocks, is that the areas given priority by the
Federal Government are beginning to respond
with understandable time lags to policy
initiatives. Indeed, as the emphasis on capital
expenditure begins to yield results and the
investment/GDP numbers increase, the growth
rate of the Nigerian economy is likely to
improve further.
“As these trends continue, 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 forecasted 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.”

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