Economists and financial experts, have highlighted major factors that are responsible for the slowdown in Nigeria’s GDP growth and what the government should do to stimulate the economy.
Nigeria’s recovery from the fallout of the COVID-19 pandemic slowed sharply in the third quarter of this year, with economists saying that the economy’s growth was hit by high unemployment, inflation and insecurity.
Figures released by the National Bureau of Statistics on Thursday shows that national output expanded by 4.03 % in the three months to September, compared to a growth of 5.01 % in the three months to June.
According to Capital Economics, Nigeria’s economy is likely to expand by a modest 2.8 % over this year as a whole, and pick up only slightly in 2022.
The NBS, in its latest GDP report released by the Statistician-General of the Federation Simon Harry in Abuja, said the 4.03% GDP growth showed sustained positive growth over the last four quarters since the recession witnessed in 2020.
He said during the quarter, aggregate nominal GDP stood at N45.11tn, an increase of 15.41% over the performance in the corresponding period of 2020.
He explained that the base effect of the negative economic growth recorded in Q2 and Q3 2020 as a result of the pandemic contributed to the growth in GDP in 2021.
He added that the current growth trend could be sustained with strict adherence to safety measures put in place to control the spread of the COVID-19 pandemic and other variants of the disease.
Harry said the country recorded an average daily oil production of 1.57 million barrels per day in Q3 2021, up from 1.67 million bpd in the same period a year earlier and 1.61 million bpd in Q2 2021.
He said the oil output decline accounted for the oil growth rate of -10.73% in real terms recorded in Q3.
He said the non-oil sector recorded growth of 5.44 % in real terms, an improvement from -2.51 % in Q3 2020 but a decline compared to the 6.74% recorded in Q2 2021.
Harry also stated that oil sector contributed 7.49% to GDP, compared to 8.73% in Q3 2020, while non-oil sector accounted for 92.51%, an increase from 91.27% in Q3 2020.
The Chairman of the Foundation for Economic Research and Training, Prof. Akpan Ekpo, linked the drop in GDP growth to structural problems in the economy.
Akpan said despite the positive growth rate, the economy had not improved as the country continued to experience stagflation.
“The economy is not improving because growth is not development. We are still in a place called stagflation, where there is high unemployment rate, double-digit inflation rate, high lending rate and high misery index,” he said.
The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, said given that the country’s GDP grew by 0.1% in Q4 2020 and that the trajectory of growth this year was primarily driven by base effect; it was expected that there would be a slower growth rate in the last quarter of the year.
He said, “If you consider that in the last quarter of last year, GDP was positive by 0.11%, it means that we should expect a growth in the first quarter but the growth will be slower than what we saw in Q3.
The CEO, Institute of Credit Administration, Prof. Chris Onalo, said there was a need to tackle insecurity and improve the power supply in the country for activities to pick up better while a former President, Association of National Accountants of Nigeria, Dr. Sam Nzekwe, said the government should work harder to increase the GDP growth for employment generation and increased productive activities.