Awaiting the death and burial of recession

Judging by how confident the governor of the Cen­tral Bank of Nigeria (CBN) Mr Godwin Emefiele was as he made the announcement, we can only but agree that, all things being equal – like econ­omists the world over always posit – Nigeria will be out of recession latest by the third quarter of this year. Accord­ing to his well-heeled argu­ment, there was nowhere else for the nation’s beleaguered economy to head on account of the abiding positive indica­tors but out of recession. Who indeed would doubt him with inflation trending down­wards, the Gross Domestic Product (GDP) improving and foreign exchange going to the real sector as and when needed?

What is more! This opti­mism is no less supported by the recent release of the na­tion’s economic position by the National Bureau of Statis­tics (NBS).

According to the release, though the nation’s GDP con­tracted by 0.52 per cent in the 1st Quarter of 2017 repre­senting the fifth consecutive quarter of contraction since the first quarter of 2016, it was 0.15 per cent higher than the rate recorded in the cor­responding quarter of 2016. It is also in real terms higher by 1.21 per cent from the rate re­corded in the preceding quar­ter which accounts for a quar­ter-to-quarter growth of 12.92 per cent. That in nominal terms this saw GDP growth standing at Naira26.03 trillion compared to the Naira22.24 trillion posted in the 1st Quar­ter of 2016 – a 17.06 per cent growth – is nothing less of a step in the right direction.

However, it is worthy of note that the inflow of foreign in­vestment into the country de­clined by a whopping 41 per cent in the quarter under re­view by the NBS. This should be a thing of worry to the man­agers of our economy. Our main concern here stems from the fact that the CBN had at the end of its 2017 2nd Quar­ter Monetary Policy Commit­tee (MPC) meeting recently retained its key policy rates citing the challenges weighing down the domestic economy and uncertainties in the global environment. Giving the aim in view, indeed many pundits had expected some changes in the light of the one in the for­eign exchange regime that has seen to a new improvement in our industrial capacities.

Moreover, it was expected that in arriving its recent de­cisions the CBN should have had them dovetail into the implementation roadmap of the already-on-stream Nige­ria Economic Recovery and Growth Plan (NERGP) 2017-2020. This supposition is buoyed on the reality that the laudable achievements of the goals of the plan need to have been started in earnest by now for any appreciable headway to be made in the nearest fu­ture. Even, by now we would have expected that the report of the NBS should have been tagged along with it to en­able the public joining in the countdown. This as opposed to waiting till it would have become like medicine admin­istered after the death of the patient.

To face the realities at play – as squarely as need be – meet­ing the rather fond goal of achieving a 4.6 per cent aver­age real GDP growth rate is worth tracking on a monthly let alone a quarterly basis. Not to add the one about achiev­ing a single-digit inflation rate by the targeted 2020 by when it also hoped that the GDP would have peaked at a high of 7 per cent. Assuredly, too, given the recent upsurge in the receipts from the non-oil sector and the enduring rap­prochement in the Niger Del­ta it is very possible that with the projected rise of crude oil output to 2.5 barrels per day within the period, recession shall only have become a thing of the distant past.

Instructive also is the ad­mission by the CBN governor that the government is still borrowing a little more than is healthy for the economy. Not unlike had been highlighted earlier by the Emir Muham­madu Sanusi II of Kano, him­self a former governor of the apex Bank. Any which way though, according to Emefiele in his report, the Net Domes­tic Credit (NDC) grew by 1.40 percent in April 2017 which annualized amounted to a mere 4.21 per cent, a far cry from the provisional bench­mark for 2017 set at 17.93 per cent.

Here at The Authority, we are not only thrilled but are also worried; the former be­cause of the light at the end of the tunnel, the later because we know that many a laud­able effort like this has been thwarted midstream. Here, we are calling for the managers of our economy to live up to the responsibilities entrusted on them to see that no stone is left unturned in this effort to steer the nation out of its de­bilitating recession. Only then will they receive the inevitable pats on the back by one and all of us in tandem.