The Federal Government of Nigeria through the Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, said that despite the exit from recession, the nation’s economic growth “remains fragile and vulnerable to policy slippages”.
The economy exited from its worst recession in 29 years on Tuesday, with the second quarter (Q2) 2017 growth rate of 0.55 per cent (year-on-year) was 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016 (-1.49%) and higher by 1.46 per cent points from rate recorded in the preceding quarter, which was revised to –0.91% from –0.52% due to revisions to crude output for March 2017.
Dr. Dipeolu, however, attributed the exit to growth in the nation’s oil and non-oil sector, saying the growth in the oil sector rose by 1.64% as compared to -15.60 in Q1 2017, an increase of up to 17 percentage points.
He said the current administration would intensify efforts to actualise the nation’s economic recovery and growth plan.
“This improvement is partly due to the fact that oil prices which have improved slightly from the lows of last year have been relatively steady as well as the fact that production levels were being restored,” Dipeolu said in a statement.
“The non-oil sector grew by 0.45% in Q2 2017, a second successive quarterly growth after growing 0.72% in Q1 2017. This increase which was not quite as strong as it was in Q2 2016 reflects continuing fragility of economic conditions.
“However, given that nearly 60% of the non-oil sectors contribution to GDP is influenced by the oil sector, growth in the oil sector will help boost the rest of the economy.
“The positive growth seen in agriculture when the rest of the economy was contracting was maintained at 3.01% which is encouraging especially if seasonal factors are taken into account.
“Manufacturing growth was also positive at 0.64% and although lower than the previous quarter’s growth of 1.36%, it was a noticeable improvement over the -3.36% experienced in Q2 2016 and a continuation of the turnaround of the sector.
“Solid minerals which remain a priority of the administration also continued to grow and in Q2 2016 by 2.24%.
“Overall, industry as a whole grew by 1.45% in Q2 2017 after nine successive quarters of contraction starting in Q4 2014.”
The president added that the positive development was “somewhat overshadowed by the continued decline in the services sector” which accounts for 53.7% of GDP.
“Nevertheless, electricity and gas, as well as financial institutions, grew by 35.5% and 11.78% respectively in Q2 2017,” he also said.
“The GDP figures give grounds for cautious optimism especially as inflation has continued to fall from 18.72% in January 2017 to 16.05% in July 2017. Foreign exchange reserves have similarly improved from a low of $24.53 in September 2016 to about $31 billion in August 2017.
“Foreign trade has also contributed to improving economic conditions with exports amounting to N3.1 trillion in Q2 2017 while imports which increased by 13.5% amounted to N2.5 trillion in the same period. The overall trade balance thus remained positive at N0.60 trillion.
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