The second straight decline in Nigeria’s Gross Domestic Product (GDP) is a show of poor economic policies of government and raises fears of a possible second economic recession if concrete and urgent actions are not taken by government to ramp up growth, experts say.
According to the National Bureau of Statistics (NBS), the struggling economy slowed to 1.94 percent second quarter of 2019, from 2.10 percent recorded in previous quarter and 2.38 recorded in the last quarter of 2018.
The Federal government has projected a 3.10 percent GDP growth for 2019, but experts say this is unrealistic going by the trend and particularly do not see any effort that suggests that this is possible.
Economic experts who spoke with Businessday have said that the continuous decline recorded indicates that the Nigeria economy is being driven on poor economic policies which may hinder the achievement of the 3.1 percent GDP growth as projected in the 2019 budget.
Johnson Chukwu, CEO, Cowry Asset management told BusinessDay that the low trend should be a wakeup call for the government to look into the sets of its economic policies.
“We need to consider the growth of the underlying sectors that contributes to the overall growth of the GDP, currently we see that these sectors are all declining, we see trade declining, we see manufacturing sector declining,” he stated.
The NBS Q2 GDP report indicates that critical sectors of economy recorded a negative growth. While agriculture sector grew by – 4.81 percent, manufacturing sector was reported at -4.41 percent.
Chukwu lamented the decline recorded in the critical sectors of the economy stressing that even those that are not on the negative have barely marginal growth which is quite disheartening to note.
“We need to check the economic policies we have, are they strong enough to support a 3.1 GDP growth rate as planned in the 2019 budget.
The results that we have today are saying otherwise, because they are what we use to measures the plans and policies of the government”.
“These figures should make us to look into our policies and point out what works and what does not”, he added.
Auwal Musa Rafsanjani, Executive Director, Civil Society Legislative
Advocacy Centre (CISLAC), told Businessday that all economic indicators in the country show that Nigeria could be approaching another period of recession, especially considering the continuous economic growth declines more often.
He said “This decline in GDP growth is a serious issue, I wish the government can be more serious with economic issues. We need a more competent economic management team to ensure the growth that we desire.”
Rafsanjani is further concerned that the Nigeria’s economic frame work is too weak to promote the desired economic growth. Poor management of public fund is also a factor to be considered, according to him.
“Investors are easily drawn to any economy that has the capacity to which is not the case of Nigeria, we have both local and foreign investors moving out in numbers and the government’s effort is barely seen of felt”, he said.
He also stressed that the government should ensure adequate and effective use of public funds to provide basic amenities as well as work towards moderate reduction in the cost of governance.
Tosan Adewale, an economic analyst in Abuja, said that the Experts say that there is need for the government to increase effort towards ensuring a more conducive environment for business to thrive as the uncertainties of the nation’s economic growth poses threat to the investors which further has effects on the overall GDP.
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