Nigeria’s economy may have grown by the most since 2015 when President Muhammadu Buhari was first voted into office, but the size of the economy has shrunk since then and Nigerians are worse off.
The shrinking size of the economy means there is a smaller pie to share among Nigeria’s 200 million people, a painful squeeze for a country that is home to the world’s largest number of poor people.
That explains why many Nigerians can not relate with the latest Gross Domestic Product (GDP) figures put out by the National Bureau of Statistics (NBS), according to Deji Obe, a Nigerian youth who has been without a job since what would be the first of two recessions in five years in 2016.
“The data gives the impression that things are finally getting better now that GDP growth has outpaced population growth for the first time since 2015,” Obe said. “But in reality, times are still very hard.”
The economy grew by 3.4 percent in 2021, the NBS said Thursday, marking the fastest growth rate in 7 years, helped by an improvement in the trade sector and low base effects. But the economy is valued at only $436.29 billion, 20 percent less than it was worth in 2014 ($546.67 billion). In that time the population has grown 13 percent.
“GDP numbers in isolation is incomplete when measuring the health of an economy, other factors like unemployment, poverty rate, inflation and human development index matter and Nigeria is nowhere near the desired level,” said Muda Yusuf , an economist and former head of trade advocacy group, the Lagos Chamber of Commerce and Industry (LCCI).
Nigeria is not only the world’s poverty capital, ahead of India which has five times its population, it’s unemployment rate at 33 percent is the second highest globally after Namibia and it has 7th highest inflation rate in Africa.
A cocktail of poor economic policies has made life in Nigeria tough, according to observers,
as tough as it has ever been in a long time.
Economists say the country’s performance in 2021, not significantly improved from the chaotic years since the recession in 2016, is made to look impressive by the impact of the COVID-19 pandemic in 2020 when the economy shrank by the most in over two decades.
“The magnitude at which the economy contracted in 2020 has certainly had a big role to play in the 2021 growth numbers so it is no surprise,” said Taiwo Oyedele, an economist and partner at consulting firm, PriceWaterhouseCoopers (PWC).
“The challenges the economy has faced since 2016 have not gone away, there is still a need for more fiscal and monetary reforms to take growth to sustainable levels,” Oyedele said.
While economists say the relatively high growth rate in 2021 is largely as a result of base effects, Harry Simon, who heads the government-owned NBS, could not agree more.
He said the impact of the low base effect could not be ruled out as it played a significant role in achieving the current figures and that it was not time to celebrate.
Nigeria’s 2021 GDP growth beats estimates