*2nd quarter figures indicate further growth in Agric, solid
mineral sectors:
*Better than IMF estimates
*Reveals highest increase in share of investment in GDP since 2010
The just released GDP figures for the 2016 second quarter by
the National Bureau of Statistics while confirming a temporary decline, has
also indicated an hopeful expectation in the country's economic trajectory.
Besides the growth recorded in the agriculture and solid mineral
sectors, the Nigerian economy in response to the policies of the Buhari
presidency is also doing better than what the IMF had estimated with clear
indications that the second half of the year would be even much better.
The Buhari presidency will continue to work diligently on
the economy and engage with all stakeholders to ensure that beneficial policy
initiatives are actively pursued and the dividends delivered to the Nigerian
people.
The following statement was made by the Special Adviser to
the President on Economic Matters, Dr. Adeyemi Dipeolu on the latest NBS
report:
"The just recently released data from the National
Bureau of Statistics showed that Gross Domestic Product declined by -2.06% in
the second quarter of 2016 on a year-on-year basis.
A close look at the data shows that this outcome was mostly
due to a sharp contraction in the oil sector due to huge losses of crude oil
production as a result of vandalisation and sabotage.
However, the rest of the Q2 data is beginning to tell a
different story. There was growth in the agricultural and solid minerals
sectors which are the areas in which the Federal Government has placed
particular priority.
Agriculture grew by 4.53% in the second quarter of 2016 as
compared with 3.09% in the first quarter. The metal ores sector showed similar
performance with coal mining, quarrying and other minerals also showing
positive growth of over 2.5%. Notably also, the share of investments in GDP
increased to its highest levels since 2010, growing to about 17% of Gross
Domestic Product.
The manufacturing sector though not yet truly out of the
woods is beginning to show signs of recovery while the service sector similarly
bears watching.
Nevertheless, the data already shows a reduction in imports
and an increase in local produced goods and services and this process will be
maintained although it will start off slowly in these initial stages before
picking up later.
The inflation rate remains high but the good news is that
the month-on-month rate of increase has fallen continuously over the past three
months.
Unemployment remains stubbornly high which is usually the
case during growth slowdowns and for reasons of a structural nature.
The picture that emerges, barring unforeseen shocks, is that
the areas given priority by the Federal Government are beginning to respond
with understandable time lags to policy initiatives. Indeed, as the emphasis on
capital expenditure begins to yield results and the investment/GDP numbers
increase, the growth rate of the Nigerian economy is likely to improve further.
As these trends continue, the outlook for the rest of the
year is that the Nigerian economy will beat the IMF prediction of -1.8% for the
full year 2016.
The IMF had forecasted a growth of -1.8% for 2016, however
the economy is performing better than the IMF estimates so far. For the half
year it stands at -1.23% compared to an average of -1.80% expected on average
by the IMF.
What is more, it is likely the second half will be better
than the first half of 2016. This is because many of the challenges faced in
the first half either no longer exist or have eased.
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