The prevailing economic conditions in the country would triggering the doubting mind of the people.
Nigerians may find it hard believing the country has truly exited recession. (THEWILL)
The National Bureau of Statistics (NBS) has declared on Tuesday, September 5, 2017 that Nigeria has come of recession it plunged into in Q2 2016.
According to the NBS’ report, Nigerian economy grew 0.5% in the second of 2017 to be officially out of the recession. But, there are many economic incidences that may make Nigerians believe the country is still in recession.
These conditions were also highlighted in a statement released by Mr Laolu Akande – Senior Special Assistant to Nigeria’s Vice President on Media & Publicity, to the media. He stated that the government is welcoming the exit with a "cautious optimism" as there still need to be more improvement in people's condition of living.
“The GDP figures give grounds for cautious optimism especially as inflation has continued to fall from 18.72% in January 2017 to 16.05% in July 2017…. Overall, the end of the recession is welcome but economic growth remains fragile and vulnerable to exogenous shocks or policy slippages.”
Here are some of the reasons that may make Nigerians to consider giving a second thought on the report.
1. Major Sectors of the economy are still down
Major economic activities are still down with no sign of improvement. (Studying Economics)
From the report, major sectors that constitute the real sector are still down. With many of them having a negative sectoral growth.
Agriculture, manufacturing, real estate, ICT and major components of service sector such as transport, education e.t.c all had a negative growth within the period.
And it is activities in these sectors that impact on the people, which trigger the disbelief that the announced statistics do not reflect the reality.
2. Prices of essential commodities are still high
Prices of essential commodities are going north, thus reducing purchasing power of the people. (Hindustan Times)
Increasing price of commodities especially food items may also make Nigerians consider this GDP results as a farce of the reality.
The purchasing power of the people is being eroded on a daily basis, as the increase in price continues. As a result, most Nigerians may not totally believe the report as cost of living is on the high side.
3. Massive layoff of workers in financial institutions and industries
Workers are constantly in fear of losing their jobs. (The Guardian Nigeria)
Massive staff layoff is another factor the populace may consider in assessing the validity of the Q2 GDP report of the NBS. In 2016, about 3.7 million jobs were reported to have been lost by Nigerians and more are expected to go in this year as well.
Mr Laolu Akande noted in a part of his statement that: “Unemployment, however, remains relatively high but job creation is expected to improve as businesses and employers increasingly respond more positively to the significantly improving business environment and favourable economic outlook.”
Owing to this, the scene of a pool of unemployed people roaming the streets of major cities in the country is one that would trigger disbelief in the news.
4. Some state government can’t pay workers
Workers protesting due to unpaid salaries is now a frequent scene in Nigeria. (CurrentNewsNow.com)
About 27 of the 36 regional governments in the country owe its workforce at least three months salaries. In spite of many bailout programs, the condition is still bad as many of these states can’t meet their financial obligations.
Civil servants in these states would surely never believe this news.
5. Federal government borrowing to implement major part of 2017 budget
Nigeria government is currently finding it hard to matching huge debt obligations with its dwindling revenue profile. (Vanguard News)
The Nigerian government is currently struggling to finance 2017 budget, as it had to frequent debt markets to raise needed funds.
Within this period, the government has raised about N3 trillion through treasury bills, FGN saving bonds, diaspora bonds and through various means possible.
This has raised the question on how the improved economy wouldn’t have led to increase in government revenue. In July 2017, the Federal Account Allocation Committee (FAAC) shared N467.8 billion among, a value less N183.266 billion than what was shared in the previous month.
With all these in play, Nigerians are reportedly expressing disbelief about the reports on the economic recovery,as the government also noted that the result calls for a cautious optimism.
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