2016 GDP Report: FG’s effort already ending recession-Presidency

The Presidency on Tuesday said the recently released reports on the
2016 overall and last quarter Gross Domestic Product shows that
Nigeria is on its way out of the recession.

A review of the recent GDP figures released earlier same day by the
National Bureau of Statistics, NBS, show a contraction of -1.30% in
the fourth quarter of 2016, translating into an estimated economic
growth rate of -1.51% for the full year.

A statement by Presidential Adviser on Economic Matters, Adeyemi
Dipeolu, said the new indices which showed an estimated growth rate of
-1.51% for the full year 2016 as against the -1.8% predicted by the
International Monetary Fund (IMF) “reflect the slow-down in the
economy for most of 2016 but also show that the recession may have
bottomed out because of an improving trend in several key sectors, including agriculture and mining”.

The Presidency said the Buhari led administration 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. It is also hopeful that the implementation of the
government’s Social Investment Programmes, the significant
infrastructural spending of the Federal Government, and a possible
early legislative passage of the 2017 budget are all expected to spur
a positive multiplier effect on the Nigerian economy.

It added that the administration will not relent in its determined
effort and it’s 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.

X-raying and commenting on the GDP figures along with government’s
efforts, the Economic Adviser to the President said “Although the oil
sector declined by -12.38% on a year on year basis, this was a
relative improvement compared to the third quarter when the decline
amounted to -22.01%.  This outcome was 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 grew at 4.03% in the fourth quarter of 2016 which was a
marginal decrease from the 4.54% growth in the third quarter.  This is
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 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 the course of the 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.

“Nevertheless, 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 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.

“In the same vein, the likely early passage of the 2017 budget
estimates would also lend further momentum to economic growth.
Similarly, the recent bond issue of US$1 billion which was subscribed
by almost 8 times will reinforce the trend of increasing reserves.
Indeed, foreign reserves rose from $23.9 billion in October 2016 to
$27.8 billion in January 2017.

“Furthermore, there is a better outlook for revenues from the
petroleum sector with revenues set to increase with oil production now
over 2m 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.

“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”.