Special adviser to the president on economic matters, Dr Adeyemi Dipeolu, stated that besides the growth recorded in the agriculture and solid mineral sectors, the Nigerian economy, in response to the policies of the Buhari presidency, was doing better than what the International Monetary Fund (IMF) had estimated, with indications that the second half of the year would be even much better.
In July, the IMF had projected that the country’s economy was likely to contract by 1.8% this year, sliding it into recession.
Dipeolu in a statement by the spokesman to the vice president, Laolu Akande, said the GDP figures released by the NBS had indicated a hopeful expectation in the country’s economic trajectory despite confirming a temporary economic decline.
He said the Buhari presidency would 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.
“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 vandalism and sabotage,” the economic adviser pointed out.
He, however, expressed confidence that the rest of the Q2 data was beginning to tell a different story as there was growth in the agricultural and solid minerals sectors, which are the areas in which the federal government had placed particular priority.
Dipeolu noted that agriculture grew by 4.53 per cent in the second quarter of 2016 as compared with 3.09 per cent 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 per cent and notably, the share of investments in GDP increased to its highest levels since 2010, growing to about 17 per cent of GDP.
“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 locally produced goods and services; and this process will be maintained although it will start off slowly in these initial stages before picking up later,” he added.
The economic adviser said although the inflation rate remains high, the good news was that the month-on-month rate of increase had 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,” he said.
According to him, 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,” he stated, asserting 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 per cent for the full year 2016.
“The IMF had projected a growth of -1.8 percent for 2016; however, the economy is performing better than the IMF estimates so far. For the half year, it stands at -1.23 percent compared to an average of -1.80 percent 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 added.