“Will Nigeria slip back into recession? Q3 2017 report will be published Monday 20th November, at 8:30 AM.”
When Dr. Yemi Kale tweeted those words on Saturday, the thoughts of economists and business news buffs momentarily shifted away from the gubernatorial polls being conducted in Anambra State, to the coming update on the state of the Nigerian economy. The last time the
National Bureau of Statistics released a GDP report,
it was a headline grabber: the report had proclaimed the end of a recession, the slow but precious rise of a hopeful sun on the horizons of the country’s economic landscape. But the latest instalment of GDP reports wasn’t as anticipated as the previous one. As Statistician General of the nation, Dr. Kale probably believed, as most analysts did, that the economy had grown further since the last report was published; and despite his attempts at creating suspense over the awaited figures, he almost certainly already knew what they were going to say: Nigeria had pulled further away from recession.
In the months of July, August and September, the country’s economic productivity (which GDP measures) grew by 1.4 percent. This was better than the 0.55 percent growth rate recorded for the preceding quarter. The new figures are already being hailed as a sign that Nigeria is “consolidating” on her economic recovery.
But, as always, there’s more to this than a single sentence summary could convey.
What the figures actually say
It only takes a cursory look at the details of the NBS report to get a sense of what has gone on here. Growth is being spurred on by a positive turn in the fortunes of the oil sector, and the sustained increase in agricultural production. The upward sail of the oil sector is noteworthy; buoyed by greater output and higher oil prices, it grew by an impressive 25.89 percent (year on year), to claw back some of the ground it lost to the recession.
Agriculture remained stable, with production in the sector rising 3.06 percent year on year, and 0.05 percent compared to the quarter before. Its share of the nation’s GDP continues to increase as well- it now contributes 29 percent of Nigeria’s domestic production. Other growth areas were arts, entertainment and recreation (0.44 percent), and electricity and gas (11.46 percent).
However, many sectors are still shrinking. Finance and insurance declined by -5.96 percent, information and communication fell -4.48 percent, manufacturing sank -2.85 percent, and trade dipped -1.74 percent. The transportation, construction, health and education sectors also posted negative growth figures for the third quarter.
The picture that emerges from all of this is of an economy being propped up by a few major sectors, while awaiting a revival in the others.
What it all means
The recession was brought on by plunging oil prices; the recent rise in those prices appears to be aiding the recovery. Agriculture has held out admirably well in the absence of petro-dollars, but other sectors have come out of that shortage bruised and battered. If there’s one thing we can learn from the GDP report released by the NBS on Monday, it’s the fact that we aren’t close to weaning ourselves off our dependency on oil.
Yet, as has already been alluded to, agriculture proves that Nigeria can survive on something other than crude oil. Agriculture isn’t immune to a crisis (what if there’s a nationwide drought or a crop pest infestation of farmlands in large swathes of the country?). But it’s an alternative that has worked in the face of the near-apocalyptic failure of black gold. We should have more alternatives to fall back on, and more forward-looking bases for Nigeria’s march into a future of renewables and sustainable development.
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This article was first published on 21st November 2017
ikenna-nwachukwu
Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.
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