Nigeria pulls out of recession, NBC confirms
According to a National Bureau Statistics report that has just been released, the Nigerian economy grew at 0.55 per cent in the second quarter of 2017, indicating the exit of the economy from recession.
The 2017 second quarter 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, revised to –0.91% from –0.52% as a result of the reviewed crude output for March 2017.
Since 2016, the country had fallen into a recession, occasioned by low crude oil prices and political instability.
Why Were We In Recession?
Nigeria’s economy depends on oil:
Nigeria economy depends hugely on oil. A combination of restiveness in the oil producing areas of the country, fallen oil prices and insecurity concerns took a toll on the economy.
Millions of jobs have been lost:
2.1 Million Nigerians lost their jobs in 2016. The National Bureau of Statistics has said that the number of Nigerians who became unemployed rose by 2.1 million to 11.55 million at the end of 2016 from 9.48 million at the beginning of the year.
Restrictions on foreign exchange market:
A rigid forex policy by the Central Bank of Nigeria forced the dollar to become scarce, leading to shortage of the commodity.
Inflation:
Recession and Inflation are two different things. There can be high inflation without the economy being in recession; inflation it seems is more like a permanent thing in Nigeria. Prices rarely react to the theories of demand and supply here.
Even when prices go up as a result of supply challenges, when this normalises, prices never revert back to previous levels.
Nigeria imports almost all its needs:
Nigeria imports more rice than all EU countries combined, according to CNN. More than half all Nigeria’s needs are imported, putting a strain on the naira against the dollar.
However, all of the aforementioned issues are being address (even if slowly) and its effect is a gradual exit from the deeply felt recession.
