Economic expert, Prof Uche Uwaleke has listed four major lessons to be learnt from National Bureau of Statistics (NBS) report which stated that Nigeria has exited the current economic recession.
According to the NBS Report released on Thursday, Nigeria’s economy unexpectedly came out of a recession in the fourth quarter as restrictions to curb the spread of the coronavirus were eased.
Gross domestic product grew 0.11% in the three months through December from a year earlier, compared with a decline of 3.6% in the third quarter.
Commenting on the development, Prof Uwaleke who commended the NBS for timely release of the report however said “It may be just number but the 0.11% positive growth in real GDP year on year recorded in the fourth quarter of 2020 has an information content”.
In a statement he made available to newsmen in Abuja on Friday, the University Don said “It is without doubt an upside surprise that sends a positive message to the international community especially the Multilateral institutions, Rating Services and Investment Banks, that the Nigerian economy is resilient and has capacity to withstand shocks”.
According to him, this development would however certainly enhance the country’s credit standing internationally.
“I won’t be surprised if it triggers an upward revision in growth forecasts for Nigeria in 2021 by the IMF and the Fitch which had projected weak growth rates of 1.5% and 1.7% respectively. It is instructive to note that favourable news about any economy can influence increased flow of foreign investments”, he noted.
He stressed that coming on the heels of the emergence of Dr Okonjo Iweala as the DG of WTO, “this is another pleasant news from Nigeria at a time when many economies are still in a recession”.
Uwaleke then listed a number of lessons to be learnt from the NBS report:
“The first is that the Nigerian economy can actually survive without the oil sector. The growth rate in Q4 2020 was powered by the Non-oil sector which recorded a positive growth of 1.69% despite a deep contraction in the oil sector by as much as over 19%. Information and Communications, Agriculture and Real Estate sectors were among the top performers.
“The second lesson is that the Agriculture sector remains a game changer, contributing over 24% to real GDP and posting a growth rate of 3.42% from about 1.3% in the previous quarter. This is remarkable and largely reflects the increased interventions in this area especially by the CBN. This should be sustained and possibly ramped up.
“The third lesson is that crude oil output is critical to the oil sector’s performance. Despite relatively higher crude oil prices in Q4 2020, the sector’s performance was dismal due largely to the declining trend in average crude oil production from over 2 million barrels per day in the first quarter of 2020 down to 1.56 million barrels per day in the last quarter.
“The OPEC cut agreement notwithstanding, it is important to ensure that the drop is not due to plant shutdowns and vandalism.
“Going forward, now that the economy has turned the corner, earlier than predicted, it is time to focus on achieving strong growth that is inclusive. By implication, more attention should be focused on jobs and reducing the high rate of unemployment and poverty.
“This will require, among others, an aggressive approach to increasing food output by facilitating access to credit by farmers and SMEs, collaborating with State governments to address rural infrastructure deficit as well as insecurity.
“Doing so will help bring down food inflation which is exerting the most pressure on the general price level. That the government heeded the advice of many including the CBN not to impose another lockdowns in the wake of the rising COVID’19 cases in Q4 2020 helped economic recovery”.
”I must commend the National Bureau of Statistics for the timely release of key national statistics, such as inflation and GDP quarterly performance, which facilitates planning by the government and the private sector as well as reduces uncertainty”, he added.
