• Latest Data Proof Recession Has Bottomed out- FG

The Federal Government, on Tuesday said the latest Gross Domestic Product (GDP) data released few hours earlier by the National Bureau of Statistics (NBS) is testimony to the that the Federal Government’s efforts at turning around the nation’s economy are bearing good fruits, especially using agriculture, among other non-oil sectors.
In a statement reacting to the fourth quarter 2016 numbers released by the NBS, Dr. Adeyemi Dipeolu, Presidential Adviser on Economic Matters, said the -1.5% GDP growth came better than the -1.8% originally projected by the International Monetary Fund (IMF).
According to him, “overall, the Nigerian economy performed better than expected even though we are still in the early stages of recovery. It is indeed noteworthy that overall 2016 growth was higher with a contraction at -1.5% than the -1.8% predicted by the IMF.”
Nigeria’s GDP contraction rate, he said, has slowed down as was the trend for most part of last year, raising hopes that the recession may have bottomed out with the improving trends in several key sectors of the economy including agriculture and mining.
Although the oil sector declined by -12.38% year-on-year, it was relatively better than third quarter’s -22.01%, he believes, “due mainly to increases in production such that the quarter on quarter growth for the oil sector between the third and fourth quarters was 8.07%.
“The non-oil sector however declined by 0.33% after showing some resilience in the third quarter when it grew by 0.03% at the height of the recession.”
Agriculture sector GDP, Dipeolu continued, grew at 4.03% in the fourth quarter of 2016, a marginal drop from the 4.54% growth in the preceding quarter, “mainly because agriculture (especially crop production, which accounts for the bulk of agricultural production) is highly seasonal, with growth in the third quarter of the year usually higher than the others.
“Nevertheless, the overall outcome for the year was that the agricultural sector grew by 4.11% for the whole of 2016 which was higher than the figure of 3.72% for 2015.
The manufacturing sector, he added, actually grew on a quarter on quarter basis by 1.89% but declined over the year by 4.32% “reflecting the problems that the sector faced in during year due to a combination of factors including the depreciation in the exchange rate and higher energy costs.
“The metal ores sub-sector grew by 7.03% in Q4 of 2016 as compared to 6.93% in the last quarter of 2015, thus justifying the priority that the Federal Government continues to give to solid minerals.
“The services sector, which accounted for 53.55% of GDP in 2016, experienced a decline in growth by -0.82% over the year as compared to a growth of 4.78% in 2015. This slowdown in the services sector arose from generally fragile economic conditions. This is because its fortunes depend to a large extent on consumer spending and government expenditure which were both adversely affected by difficult economic conditions.”
The Buhari administration, he said, is also hopeful that with the ongoing series of engagement with the oil-producing communities of the Niger Delta, the increased oil production output would be sustained.
Other factors expected to spur a positive multiplier effect on the economy this year and beyond, he said, include faithful implementation of the Social Investment Programmes (SIP), government’s significant infrastructural spending, and a possible early passage of the 2017 budget.
The Presidential Adviser expressed hope that “the Social Investment Programme of the Federal Government and the relatively high level of infrastructural spending in late 2016 as well as 2017 capital spending plans should begin to have a multiplier effect on the economy.”
The trend in nearly all the sectors, Dipeolu noted further, “showed a growth improvement in nominal terms although such effects were outweighed by inflationary factors. The expectation is that this trend and the slowing down of month-on-month inflation will enable an early return to positive growth in the economy. This positive trajectory will also receive a boost from the positive news emerging from other parts of the economy.
“Notable in this regard is the release of the Economic Recovery and Growth Plan by the Federal Executive Council which sets the stage for further fast-tracking of recovery and economic diversification.”
Also, he believes that the likely early passage of the 2017 budget estimates would lend further momentum to economic growth, just as the recent bond issue of US$1 billion which was subscribed by almost eight times will reinforce the trend of increasing reserves.
Nigeria’s foreign reserves, he recalled, rose from $23.9 billion in October 2016 to $27.8 billion in January 2017, assuring that “there is a better outlook for revenues from the petroleum sector with revenues set to increase with oil production now over two million barrels per day while oil prices holding relatively steady at an average of about $55 per barrel.
“This improved outlook for the oil and gas sector is closely linked to the on-going engagement and dialogue between the Federal Government and various communities in the Niger Delta.”
The Muhammadu Buhari administration, he assured, will not relent in its determined effort and comprehensive approach to bring about the full recovery of the Nigerian economy and set it on a solid path of sustainable growth. Our work continues and we renew the pledge to do it with diligence, and the firm commitment it deserves.