Nbs Report Proved Imf Predictions Wrong; Economy Performing Better – Presidency
SAN FRANCISCO, August 31, (THEWILL) – Despite the economic recession that the country is presently grappling with, the Presidency on Wednesday declared that the Nigerian economy is performing better than the predictions of the International Monetary Fund, IMF.
It however admitted that the inflation and unemployment rates in the country had remained “stubbornly high” despite government's efforts.
The Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, stated this in a statement issued in reaction to the Gross Domestic Product, GDP figures for the 2016 second quarter released by the National Bureau of Statistics, NBS.
Official figures released on Wednesday by the bureau confirmed that the Nigerian economy is in recession. The report revealed that Nigeria's economy contracted by 2.06 percent to record its lowest growth rate in three decades, adding that the economy shrank by 0.36 percent in the first quarter of 2016 to hit its lowest point in 25 years.
Dipeolu noted that the report, while confirming a temporary decline, has also indicated what he called hopeful expectation in the country's economic trajectory, stressing that there were clear indications that the second half of the year will be better.
“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,” he said.
The presidential aide assured that the current administration would continue to work diligently on the economy and engage with all stakeholders to ensure that beneficial policy initiatives were actively pursued and the dividends delivered to the Nigerian people.
Quoting the recently released data from the NBS as showing a decline in GDP by -2.06% in the second quarter of 2016 on a year-on-year basis, he attributed the outcome to a sharp contraction in the oil sector due to huge losses of crude oil production as a result of vandalisation and sabotage.
Dipeolu encouraged Nigerians to cheer up, giving four reasons to show that the second half of 2016 was promising.
Stressing that agric and solid minerals are “growing”, he said: “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.”
The presidential aide also talked about the “recovery” in the manufacturing sector thus: “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.”
Pointing out that the inflation rate is “falling”, he said, “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.”
Concluding that IMF predictions are already wrong, Dipeolu, averred that 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,” he stated.