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Mixed reactions trail new Nigeria’s GDP growth of 5.01% in Q2

Nigeria's Gross Domestic Product (GDP) growth of 5.01% for the second quarter of this year announced by the National Bureau…

Nigeria’s Gross Domestic Product (GDP) growth of 5.01% for the second quarter of this year announced by the National Bureau of Statistics (NBS) has been received with mixed reactions by many Nigerians who find it difficult to accept such a figure in the face of daunting security and economic challenges in the country.Some economists, who spoke with the News Agency of Nigeria (NAN) were impressed with the figure announced by the NBS, while others had their reservations. For instance, Sheriffdeen Tella, Professor of Economics at the Olabisi Onabanjo University Ago-Iwoye, in Ogun, said that the GDP figures represented good news, if the figures were true.

“A GDP growth of 5.01 percent is a strong indicator for improved welfare. But the reality on ground does not support such growth rates.

“However, the sub-sectors identified for the growth, except, transportation, cannot impact seriously on employment and income whereas agriculture and industrial sectors that would impact on these recorded slow and negative growth respectively.

“Actually, the fact is that the growth witness emanated largely from oil sector with improvement in oil prices since the beginning of the year.

“The government still needs to address issue of security for agriculture and industries to pick up,” Tella said.

Another economist, Hassan Oaikhenan, Professor of Economics at the University of Benin, Benin-City, is worried that the GDP growth data do not reflect the reality on ground.

He urged government to come up with pragmatic and decisive policies that are geared towards sourcing raw materials for the manufacturing sector from within.

He said the agricultural sector needed to be harnessed to provide the raw materials needed by the industrial sector.

“There is need for pragmatic and actionable policy actions to create linkage between the industrial and agricultural sectors,” he said.

For Prof Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, the GDP growth figures meant the economy had opened up from the COVID-19 induced dislocations.

He noted that in a comparative basis, improvements in services were expected in view of the greater resort to ICT-induced service enhancement in the economy.

“However, the prevailing insecurity challenges in the country is a serious drag to output growth. If insecurity challenges are confronted headlong,  economic growth in the coming quarters will be enhanced,” Nwokoma said.

And for Nigerian President Muhammadu Buhari, who had been criticized for the worsening security challenges and poor handling of the economy, it   was a cheering news.

Mr. Femi Adesina, presidential spokesman, said in a statement in Abuja that President Buhari commended managers of the economy for hard work and commitment, urging them to keep at it till the positive development “touches the lives and pockets of the average Nigerian.”

President Buhari noted the decline in real growth in the oil sector in Q2 2021, compared to a year ago, indicating oil production levels at 1.62million barrels per day, compared to 1.67million barrels per day in Q2 2020.

According to him, the lower production output, as well as the volatility in oil prices since the beginning of the COVID-19 pandemic, was responsible for the decline in performance of the oil sector.

The president, however, assured that a combination of recent reforms and efforts were certain to attract new investment to the oil and gas sector, as well as create conditions for more robust levels of growth in the future.

He cited these reforms and efforts to include the Marginal Fields Bid Rounds, the renewed focus on gas development, including the NLNG Train 7 project, and various pipeline construction projects, as well as the passage and assent to the Petroleum Industry Bill (PIB).

”It is gratifying to note that the various policies of the administration, aimed at boosting agricultural production, improving the business environment and investing massively in infrastructure, are beginning to yield fruit.

”Equally gratifying is the complementary news of the steady decline in the rate of inflation, over the last few months.

”The positive effects of the Economic Sustainability Plan (ESP), which helped fast-track the country’s exit from the COVID-induced recession of 2020, continue to be evident, as some of the sectors driving the Q2 2021 growth have benefited or are benefiting from government-led interventions.

”The successful roll-out of vaccines and COVID-19 protocols has also helped to reduce pressures on the healthcare system and the need for a lockdown,” he said.

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