Thanks to two sectors – agriculture and telecommunications — Nigeria’s Gross Domestic Product (GDP) moved into positive territory, albeit with a marginal growth of 0.11 per cent, in the fourth quarter of year 2020.
Although the economy, over all, contracted by 1.9 per cent for the full year, the performance, coming after a recession (two successive negative growths of 6.1 per cent and 3.6 per cent in the second and third quarters respectively), suggests an economy on a steady rebound — all of this against the International Monetary Fund’s initial projection of a deep contraction of 5.4 per cent, which it later revised to 4.3 per cent, in October last year.
Equally noteworthy is that oil production actually fell from 1.67 million barrels per day average, recorded in the two preceding quarters, to 1.5 million barrels during this period; just as the non-oil sector grew by 1.7 per cent: powered mainly by agriculture (3.4 per cent) and telecommunications (17.6 per cent).
With the Nigerian economy again proving the IMF/World Bank bookmakers wrong, our operatives have quite understandably been striving to claim some credit.
Whereas the Presidency believes the rash of measures rolled out under its Economic Sustainability Plan (ESP) made the difference, the CBN argues its targeted interventions – which it puts at 3.5 per cent of the GDP – actually saved the day.
As for the National Bureau of Statistics (NBS), it sees the development as marking the gradual return of economic activities, in the aftermath of the easing of restrictions. Hence, the limited local and international economic activities of the preceding months.
There is certainly no question that the initiatives, taken together, have all helped in different degrees, to mitigate the impact of the potential devastation that could have been wrought by the Covid-19 pandemic on the economy.
However, the issues this time, should not be so much about who gets or deserves the credit for the ‘growth’ but the impact of the modest growth on households, small and medium-scale businesses; as indeed the need for a more nuanced and generalized appraisal of the challenging context, in which future growth is expected to take place.
It begins with the basic question of whether the growth is sufficiently inclusive to promote the well-being of the ordinary citizen — in other words, whether the critical foundations needed to deepen the economy, to engender greater participation and inclusiveness, reduce poverty and dependence, particularly on foreign goods, are being fostered at this time. It touches upon the overall state of insecurity and whether this could be said to bode well for the desired growth.
As against the current premature and effusive claims of performance, it certainly would require a more reflective appreciation of the wider context of the current development, if only to truly appreciate the quantum of the work that lies ahead.
True, the country has technically exited the recession. But a number of its correlates still subsist. It explains why the manufacturing sector has remained at best sluggish; same with the small and medium-scale enterprises sector, which performances have been sub-optimal.
Not even agriculture, a major driver in the recession exit, is spared. With each passing day, the sector is increasingly endangered. The story across the federation is one of farmers deserting their farms in droves, in the engulfing climate of fear being promoted by armed herdsmen.
In addition, agriculture is a sector that already had enough to contend with, in infrastructural and logistical challenges. The result is the inflation in food prices which, according to NBS, has hit a 12-year high of 20.57 per cent. (The annual inflation rate, by way of contrast, stands at 16. 47 per cent).
The same could be said of aviation, the hospitality and tourism sectors; all of them, without exception, still reeling under the crushing aftermaths of the lockdown — and all of this at a time of unprecedented population boom and unemployment spikes.
Given all of these challenges, exiting the recession is only a necessary first step in the journey. Next is the challenge of nudging every single sector to steady, sustainable growth.