Don’t politicise GDP growth

The National Bureau of Statistics (NBS) revelation that the nation’s Gross Domestic Product (GDP) grew to 3.19 per cent in the first quarter 2024 has elicited mixed reactions from private sector players. The 3.19 per cent growth represents 68-basis point increase compared to 2.51 per cent recorded in the corresponding period of 2023. This is higher than the Q1’22 growth of 2.98 percent. President Bola Tinubu described the GDP growth as a strong signal of economic rebound. But the Manufacturers Association of Nigeria (MAN) and the SMEs unit of the Lagos Chamber of Commerce and Industry (LCCI) have faulted the NBS report. They said other key indicators show the economy is far from recovery. 

The NBS had in its report noted that the performance of the GDP in the Q2 of 2024 was driven mainly by the service sector, which recorded a growth of 3.79 per cent and a contribution of 58.76 per cent to the aggregate GDP. Besides, the report says that agricultural sector grew by 1.41 per cent compared to 1.5 per cent growth recorded in the Q2 of 2024. The growth of the industry sector was put at 3.53 per cent is an improvement from the previous negative (-1.94 per cent) recorded in the Q2 of 2023. 

Additionally, the NBS report showed that the oil sector grew by 10.15 per cent in Q2 of 2024, while the non-oil sector growth was 2.8 per cent during the period under review. Also in Q2 of 2024, Nigeria recorded a daily oil production of 1.41million barrels, higher than the daily average of 1.22mbpd recorded in the same quarter of 2023 by 0.19mbpd, but lower than the Q1 of 2024 production value of 1.57mbpd.  However, the robust expansion of the economy is yet to reflect in the standard of living of Nigerians and the manufacturing sector.

While millions of Nigerians are daily entering the poverty net, about 737 firms have been closed due to harsh business environment. The galloping inflation and high cost of raw materials and other factors may have worsened the situation. Any positive GDP growth rate ought to show impact on key sectors of the economy. The purchasing power of average Nigerian consumer has been reduced on account of unprecedented rise in the prices of essential commodities. 

The NBS has apparently lost public confidence in recent times based on its rebased labour force data. It posted that Nigeria’s unemployment rate in Q3 of 2023 was 5 per cent. Actually, the unemployment rate was 33.3 per cent based on new Nigerian Labour Force Survey (NLFS). This is why many experts have faulted its latest GDP growth rate. The Director-General of the World Trade Organisation (WTO) and Nigeria’s former Minister for Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, stated at the recent Nigerian Bar Association (NBA) conference that Nigeria’s GDP has been on a steady decline since 2014, and has remained so till date, signaling a downturn in the economic well-being of the people.

Let the government heed her timely advice. 

Contrary to the NBS report, Nigeria’s GDP in the Q1 of 2024, slowed to 2.98 per cent. It is lower than the 3.46 per cent in Q3 of 2023. This is against Nigeria’s positive GDP growth rate between 2000 and 2014 when the average GDP growth was 3.8 per cent annually. It is bad for the NBS to overlook the fact that Nigeria’s GDP contracted from $477billion in 2022 to $375billion in 2023. The GDP is projected to further drop to $253billion by the end of 2024, a massive drop of about 93 per cent in two years.

This is attributed to naira devaluation and other monetary policy flops.

We decry the failure of successive governments to sustain the rate of economic growth and development that can keep pace with population growth. We advise the government to focus on inclusive growth across key sectors of the economy and minimise policy inconsistencies. Let the government see governance as a social contract between it and the citizens, rather than a relationship between it and a few political elites. 

The NBS should give Nigerians a realistic and reliable GDP data. There is even no need to politicise data. Doing so is neither in the best interest of the economy nor the development of the country. We align with the IMF forecast that Nigeria’s economy can only turn the corner, and even accelerate beyond the IMF’s projected 3.1 per cent for 2024 if the government can reduce structural inefficiencies by at least 25 per cent, especially in governance and business regulations.