Nigeria maintains growth momentum at 1.92 per cent

The nation’s economy has officially been declared to be fully on growth path with the unveiling of the growth figures for the fourth quarter (Q4) of 2017 at 1.92 per cent.

The Nigerian Bureau of Statistics, yesterday, affirmed that the Gross Domestic Product (GDP) grew by 0.83 per cent on average in 2017, representing 2.42 per cent higher than -1.58 per cent average recorded in 2016.

The report was the third consecutive month-on-month growth in the Gross Domestic Product of the country, after about five-quarter slump, which put the economy in recession.

Specifically, the GDP, which grew by 1.92 per cent (year-on-year) in real terms in Q4 2017, maintained a positive growth since the emergence of the economy from recession in Q2 2017 and compares to a contraction of 1.73 per cent in Q4 2016 and a growth of 1.40 per cent recorded in Q3 2017.

Since the country emerged from recession in Q2 2017, it has been described as “fragile”, especially as the recovery has been led by rising crude oil prices since it is largely due to higher oil prices.

But NBS also noted that beside resurging crude oil prices, crop production and natural gas, metal ores, construction, transportation and storage, trade, electricity and gas production contributed to the growth.

An analysis of the NBS data showed that while the manufacturing sector grew by 0.14 per cent against -2.85 per cent in the preceding quarter, the agriculture sector grew by 4.23 per cent from 3.06 per cent in Q3 2017 and 4.03 per cent Q4 2016.

A Research Analyst at Cyprus-based FXTM, Lukman Otunuga, said investor sentiment over the Nigerian economy has once more been uplifted after the official reports showed that the nation “bounced back to life in 2017, after experiencing its first recession in over 25 years.”

“With Nigeria slowly breaking away from the shackles of oil reliance and deriving growth from other sustainable sources, the outlook remains highly encouraging.

“For Nigeria to maintain this current positive momentum, it is vital that the 2018 budget is approved. With economic growth prospects on a positive trajectory and inflation stabilizing, the Central Bank of Nigeria could be encouraged to cut interest rates sooner than expected to support growth further,” he said.

According to a report, the Chief Economist for Africa at Standard Chartered, Razia Khan, was quoted as saying that “the growth rate still lags far behind where Nigeria should be,” although she noted that the full-year growth was higher than the 0.7 per cent forecast by her bank.

She however, warned: “Unless the 2018 budget is approved soon … higher oil prices alone are not going to be sufficient to provide a really strong lift to the GDP numbers.”

Also, an Infrastructure Economist at the University of Abuja, Prof. Siyan Peter said inclusive growth, where citizens would  positively feel  the impact of development will continue to elude Nigeria so long as the current administration does not see the need for the setting up of an Economic Team led by Economist.

His words: “Inclusive growth can only be achieved if we diversify the economy, where there would be multi -sectoral growth. That way, there would be sustainable growth because you are going to experience employment in all the sectors, hence citizens would now feel the growth. Unfortunately what you have now is the opposite.”