NBS report on growth, population signal stagnating economy - Economist

The latest data from the Nigerian Bureau of Statistics (NBS) showed that the Nigerian population growth rate was 2.5 percent, while the GDP growth rate in real terms was also 2.5 percent, a development seen as worrisome, and a clear signal that the economy is stagnating.

Economist Andrew Uviase, managing partner at Ecovis OUC (Chartered Accountants), a leading tax, accounting, and audit consulting firm, shared these insights in an interview.

While acknowledging the modest progress, Uviase’s considerations add depth to discussions on economic recovery, emphasizing the need for careful analysis without undermining the NBS’s efforts.

Uviase expressed worry over the parallel growth rates of the Nigerian population (2.5%) and the real GDP (2.5%), emphasizing that this signals a stagnating economy. He pointed to the changing age distribution of the population and the deteriorating state of infrastructure, suggesting that the present results may indicate a worrisome decline in the well-being of citizens.

“ When the real GDP growth is compared with the changes in the age distribution of the population and the age of our decaying infrastructure, we can better imagine the level of deterioration that the present results portend for the well-being of our citizens.”

Highlighting major areas of concern, Uviase underlined the decline in the real sector of Agriculture and Industrial sectors’ contributions to GDP, while the Services sector is on the rise.

He raised questions about the overall reliability of the information presented, particularly in terms of content and mode of presentation.

Nominal GDP figures for Q3 were compared with the corresponding amount in 2022, revealing a 16.08 percent growth. Uviase expressed doubts about the accuracy of the real GDP for Q3, arguing that, given the shocks and inflationary pressures experienced, the figures should be more realistic. He voiced concern about the declining contribution of real sectors, foreseeing potential consequences like increased imports of food items and finished goods.

Uviase advocated for a more transparent approach to GDP reporting, suggesting that nominal and real GDP figures should be presented in the analysis for easy comparison between periods. He criticized the current practice of providing only percentage growth rates without displaying actual figures, deeming it susceptible to manipulation.

“The nominal GDP for the third quarter is N60.65 trillion, as against N52.25 trillion in the third quarter of 2022. We are rightly told that the growth represents 16.08 percent nominal GDP growth in the two periods. Our Statistician says that the real GDP in Q3 is N19.889 trillion, while the corresponding figure for 2022 is N19.294 trillion. It is doubtful if the real GDP in 2023 is correct. Given the shocks and inflationary pressure that we have experienced in Q3 of 2023, the real GDP should be about half of the N19.294 trillion. I believe that the figures ought to be more realistic so that policymakers can use them properly.”

Looking ahead, Uviase expressed a cautious outlook for the last quarter of the year, anticipating that economic challenges, including inflation due to fuel subsidy removal and Naira devaluation, will persist.

He predicted nominal GDP growth but expected a decline in real GDP if measured accurately.

“The last quarter of the year is not expected to be significantly different from the third quarter. Economic agents are still battling with the scourge of inflation due to the fuel subsidy removal and devaluation of the Naira. We also have energy costs which have skyrocketed in the current period. My prediction is that nominal GDP will grow but real GDP will decline if measured properly and realistically.”