TUE, SEPTEMBER 5 2017-theG&BJournal– The fact of the economy recording a Q2 GDP growth of 0.5 percent, after a long period of slumber, that time is right for the managers to start clinking glasses and patting on the back leaves the hard question about the fragility of the economy unanswered.
The federal government and indeed the Central Bank of Nigeria (CBN) has been frenetically administering recovery doses for a while, and it is generally agreed, did a decent job under tough circumstances. But have the investors, both local and international, as well as the markets taken a strong view about the future? Or has the pace of growth quickened?
Yes, both the National Bureau of Statistics (NBS) and the statistics office of the CBN confirm Manufacturing PMI growth at 53.6 index points in August 2017, indicating expansion in the manufacturing sector for the fifth consecutive month as well as GDP growth of 2.04% higher than the rate recorded in the corresponding quarter of 2016, both results merely indicates a technical exit from recession classification.
In other words, the country has just bottomed out. We have just achieved equilibrium but at a much lower level before the recession hit properly last year. The pace of recovery across all sectors is still drab and flattish.
So, it is important to remind us that it still requires a lot more hard work to trigger the glass-clinking on a much larger scale and, does not concern relaxing grip on the implementation of the economic recovery measures put in place by the President Muhammadu Buhari’s administration. It is whether those at the helm will apply more strategic approach to managing the threats that still locks around, ranging from the high cost of regulation and the burdens of bureaucracy to the dysfunctional electricity sector.
Another reminder; the country will require 2-digit annual growth for several years to begin to get back to the pre-2015 GDP size. Bear in mind also that manufacturing growth is still under 1 percent sectorally compared to largely 3 percent from rain-fed agriculture. In other words the economy is still structurally weak.
To fix the weakness will require not just better execution of the recovery policies but also shrewder economy sense and understanding. The CBN, the Ministry of Finance and all agencies and departments responsible for the economy needs to stick to what it has been doing so far and do it better going forward.