Nigeria came out of recession in the second quarter of 2017 as recorded by NBS. And the nation’s Gross Domestic Product (GDP) experienced growth by 0.55 per cent, which signifies the economy was out of recession after five consecutive quarters of contraction since Q1 2016.
But most Nigerians have not felt the impact of the above mentioned as the prices of some commodities are still on the high side and this could be as a result of the high population as it is the most populous country in Africa with over 180 million people.
The senate president in his 2018 budget speech said as Nigeria emerged from recession, the question on the lips of many Nigerians is “How does the recovery translate into tangible economic benefits for me?”
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The rebound in oil production due to the relative peace in the Niger Delta and the recent increase in oil price from the average value of $57 per barrel in the Q1 of 2017 to its present value of about $63.72, coupled with improved foreign reserves, signals the end of a recession.
The inflation rate, measured by the Consumer Price Index (CPI), has further dropped to 15.91 per cent in October from 15.98 recorded in September 2017.
According to the Central Bank of Nigeria (CBN), external reserves rose by $1.37 billion in October to $33.86 billion from $32.49 billion in September. The increase recorded in October was over 100 per cent higher than the $660 million increase recorded in September.
Mr Ayo Akiwumi; Head of research, Merchant Bank had the following to say as per why Nigerians say they have not had the tangible economic benefit of the economy’s emergence from the recession;
“That the economy should expect future growth with regards to the already experienced growth in the nation’s GDP, that the growth will be a gradual process, from the expansion of businesses activities due to increase in oil price, appreciation of naira against the dollar, increase in foreign reserve, foreign exchange, capital market and payment of dividend by companies.
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And that the process is a continuous circle, companies will tend to expand, employ more labour, more income will be generated which will enable people to buy more products produced by the firms. With the World Bank release of the ease of doing Business, which Nigeria moved 24 steps higher. That indeed the nation is out of recession”.
And the tangible economic benefits this translates to the individual can be seen in the area of the prices of flight tickets, prices of rice, companies’ ability to now execute projects, workers not be laid off as the case was in the year 2016 and Q1 of 2017 when the prices of all the above mentioned were high.
The increase in the price of oil alone will not be able to make the country feel the emergence from the recession as it contributes only 9% to the nation’s GDP, with Agricultural sector contributing about 23% to the GDP. This again stress on the need for more investment into agriculture in Nigeria.
ENDURANCE OKAFOR
