According to a statement by the Special Adviser to the President for Media and Publicity, Femi Adesina, the fourth quarter 2018 Gross Domestic Product (GDP) report recently released by the National Bureau of Statistics (NBS) “gives lots of cause to cheer.” The report showed growth of 2.38%.
Backstory: Nigeria’s economy has been sluggish since slipping into recession in 2016. The NBS report which was recently released has shown that the economy grew by 2.38% in the fourth quarter of 2018, with an annual GDP growth rate of 1.93% in the same year. It’s a long way off from the highs experienced pre-Buhari but the administration is talking it up as a breakthrough.
The Presidency says the economy is now “on firm, solid footing” while giving kudos to President Muhammadu Buhari.
The press statement by Adesina listed the following 10 “salient points” to be noted from the NBS report:
1. The economy has recorded continued progress since it emerged from recession in 2017. Current result shows Real GDP growth of 2.38% compared to 1.81% in Q3 last year, the strongest since the economy slipped into recession in 2016.
2. For more than five decades, Nigeria has paid lip service to diversifying the economy, from sole dependence on oil. The latest result shows that economic growth has continued to be driven by the non-oil sector, which grew by 2.70% in Q4 2018, up from 2.32% in Q3 2018. It represents the strongest growth in the sector since Q4 2015.
3. The non-oil GDP growth was driven by Quarrying and Other Minerals, followed by Telecommunications, Agriculture, Manufacturing, and Construction. That is diversification in progress, real-time, no matter what the naysayers may say.
4. While the non-oil sector actually drove GDP growth, the oil sector contracted with crude oil and gas GDP reducing by -1.62%. This shows that with good governance, focus, prudence, and accountability, the life of the country need not depend on oil ad infinitum.
5. The NBS report further shows that Services GDP growth recorded its best performance in 11 quarters, growing by 2.90% compared to 2.64% in Q3 2018 and 0.10% in Q4 2017. Overall, while growth in the economy was moderated by the contraction in the oil sector, 39 out of 46 economic activities recorded positive growth in the quarter under review.
6. The improvement can be attributed to the Government’s continuous implementation of the policy initiatives in the Economic Recovery and Growth Plan (ERGP), which has boosted the performance of the non-oil sector.
7. The growth in Q4 2018 GDP is consistent with the improvements in other macroeconomic indicators, including inflation, capital inflows, foreign trade, external reserves, amongst others.
8. Headline inflation has been trending downwards from 18.55% as at December 2016 to 15.37% in December 2017 and further to 11.44% in December 2018.
9. The total value of capital importation into Nigeria stood at $2,140 million in the fourth quarter of 2018. This translates to a full year capital inflow of $16,812 million compared to $12,228 million in 2017.
10. Although the economy is now growing, more still must be done to deepen its diversification and make it less vulnerable to external shocks. That is an unflinching commitment of the Muhammadu Buhari administration.