Recession: Not yet Uhuru

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Recession: Not yet UhuruTHE  National Bureau of Statistics’ (NBS) latest overview of national productivity between April and June 2017 has noted a 0.55 per cent positive productivity growth rate. This means that the steady decline in the output of goods and services which began in March 2016 has now been reversed by June 2017. The turnaround of growth in economic activity witnessed in Q2-2017 was driven largely by the relatively stable oil prices, around $50 per barrel during the period. Also, oil production increased as a result of government initiatives that reduced conflicts and sabotage in the Niger Delta region. The period also witnessed marginal growth in sectors such as agriculture, manufacturing, construction, finance and insurance and real estate. The economy contracted by 1.6 per cent in 2016. Nigeria’s coming out of recession is cheering news for the government of President Mohamadu Buhari that has had to confront recession and its attendant hardships in a country with high levels of poverty and unemployment at inception. However, it must be recognised that Nigeria merely limped out of recession. The 0.55 per cent growth is less than robust, and given the contribution of the rebound in the oil market in the growth process, the recovery could be cut short if oil prices fell again. Furthermore, critical inclusive growth instigators such as inflation remain in double digits, while borrowing to produce carries over 20 per cent interest rate. There are therefore clear threats to the sustenance of growth in short to medium terms.

We are happy with the realistic reaction of the president to this achievement. President Buhari has rightly declared that he will remain unimpressed until the positive statistical rates translate into food on the table and more jobs to improve the welfare of many Nigerians. This means that he recognises that he has a serious job ahead. However, the same does not apply to other government officials. It is wrong for some members of the Senate, the Minister for National Planning and some All Progressives Congress (APC) officials to have been jubilant over the meagre limp out of recession. The times call for sober reflection, consistency in diligent implementation of the economic recovery plan, and massive job creation.

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The government must recognise that its actions and inactions contributed to the onset of recession. This is important because of the penchant to blame preceding administrations for the current economic and social challenges of the country. Several officials of the Buhari government and the ruling APC  had blamed the Peoples Democratic Party (PDP) that had ruled the country for about 16 years for generating the recession through its alleged profligacy and mismanagement of the country’s resources. They had also blamed the then escalating conflicts and activities of militants, such as The Avengers in the Niger Delta, on the ousted government. However, not a few thought that the government was failing in its responsibility to stem the tide by engaging in blame games. It was in April 2017 that the Buhari administration launched an Economic Recovery and Growth Plan, which Lai Mohammed, the Information Minister, now claims has contributed a great deal in bringing the economy out of recession. That was almost two years into its four-year term.

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Government officials continue to live flamboyant lifestyles that do not reflect the economic hardship of majority of Nigerians. We call on such government officials to exercise fiscal discipline in the use of public funds and resources. We enjoin the government to learn from its mistakes and trudge on to greater success with the economy.  It should seek the knowledge and skills of experts to address the emerging issues.  South Africa came out of recession at the same time Nigeria did with higher growth rate of 2.5 per cent, driven largely by a big rise in agricultural output at 33 per cent. Nigeria needs to transform the agricultural sector, which rose by a meagre 3 per cent; support the manufacturing sector and generally improve on its economic competitiveness in strategic ways. The country’s GDP needs to grow by 3 per cent every year to keep up with the rise in its population growth rate.

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