20170907

Why Nigerians are not feeling impact of exit from recession

Statistician-General of the Federation and Chief Executive, National Bureau of Statistics, Dr. Yemi Kale, on Wednesday explained why Nigerians were not feeling the real impact of the positive economic growth rate on their lives.
Kale attributed the non-impact of the exit from recession on the citizens to the structure of the economy, which is still largely driven by oil.
He said while the economy might have recorded a growth rate of 0.55 per cent in overall Gross Domestic Product for the second quarter, not all the sectors did well in terms of productivity.

For instance, the NBS boss explained that out of the 42 economic activities that were used to measure the GDP growth rate, 21 recorded decline in productivity, while the rest performed better than they did in the first quarter.

He said the 21 of those economic activities that recorded slowdown in performance were those that ordinary Nigerians relate with on daily basis.

For instance, the NBS boss said while the manufacturing sector grew by 0.64 per cent in the second quarter, there were some segments of the sector that did not do well.

He gave some of them as manufacturing, which contracted by -10.88 per cent; motor vehicle and assembly, which contracted by -19.72 per cent; electrical and electronics, which contracted by -1.7 per cent; and chemical and pharmaceutical products, which declined by -0.98 per cent.

In addition, wood and wood products contracted by -2.09 per cent; pulp, paper and paper products, -1.85 per cent; and cement, -4.16 per cent.

Kale explained, “Recession is not about the price of your goods, not whether unemployment is going up or down, not whether you have quality education, it’s purely your Gross Domestic Product; your outputs of goods and services in the economy are going down.

“The GDP is an accumulation of 46 different economic activities in Nigeria and the overall number, whether positive or negative, will determine whether you are in recession or out of recession.

“Now, within those 46 activities, some sectors will do very well and will be positive; some will do badly, some will do worse, and some will stay the same way they are.
“Depending on who you are in the society, what we publish is the aggregated total of everybody. So, even in that same report, you will see that 21 sectors were negative and there are other sectors that did well.”
He advised that with the economy being out of recession, there was a need for the government to work assiduously to ensure recovery by taking the growth rate to where it was before the decline in performance. After this is done, he said the next stage would be to sustain the growth and take it beyond the rate of recovery.