The federal government yesterday admitted that the country’s economy was in full recession, having earlier said in July that what the country was experiencing was a technical recession.
The confirmation by the federal government followed the release of data by the National Bureau of Statistics (NBS) on Wednesday, which revealed that Nigeria’s economy nose-dived again in the second quarter of 2016, with the Gross Domestic Product (GDP) dropping by 2.06 per cent (year-on-year) in the same period, sliding the economy into full recession.
Minister of Finance, Mrs Kemi Adeosun, at a briefing after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja, pointed out that it was a difficult time for Nigeria, but said the nation could overcome the slump by diversifying its income base.
“I think that we have a long way to go. We’re not confused and we’re not deceiving ourselves that everything is rosy; it’s not. It’s a difficult time for Nigeria but I think Nigeria is in the right hands. And if we can stick with our strategy – we still have some adjustments to make; I think we need to make some adjustments in monetary policy; it’s quite clear we do and we will do that; we’re working on that, (then we’ll pull through),” the minister said.
According to the NBS data, the negative growth was lower by 1.70 per cent from the growth rate of 0.36 per cent recorded in the first quarter.
“In the Second Quarter of 2016, the nation’s GDP declined by -2.06 per cent (year-on-year) in real terms. This was lower by 1.70 per cent points from the growth rate of -0.36 per cent recorded in the preceding quarter, and also lower by 4.41 per cent points from the growth rate of 2.35 per cent recorded in the corresponding quarter of 2015. Quarter-on-quarter, real GDP increased by 0.82 per cent during the quarter, nominal GDP was N23,483,954.78 million (in nominal terms) at basic prices. This was 2.73 per cent higher than the Second Quarter 2015 value of N22,859,153.01 million. This growth was lower than the rate recorded in the Second Quarter of 2015 by 2.44 per cent points,” the NBS stated.
The statistics bureau further noted that inflation rose by 17.1 per cent (year-on-year), an 11-year high, translating to 0.6 points increase when compared with 16.5 per cent reported in June.
“In July the Consumer Price Index (CPI), which measures inflation, increased by 17.1 percent (year-on-year), 0.6 percent points higher from the rate recorded in June (16.5 percent),” the data indicated.
A close look at the figures showed that the increase in CPI manifested in all Classification of Individual Consumption According to Purpose (COICOP) divisions.
On the other hand, unemployment rate rose from 12.1 percent in the first quarter of 2016 by 1.78 per cent points to 13.3 per cent in the second quarter.
“In Q2 2016, the labour force population (i.e. those within the working age population willing, able and actively looking for work) increased to 79.9 million from 78.5 million in Q1 2016, representing an increase of 1.78% in the labour force during the quarter.
“This means 1.39 million persons from the economically active population entered the labour force,” the government agency said.
The current rate is the nation’s lowest level of unemployment in recent time, compared to Q4 2015 and Q1 2016 when the rate of labour force population increased by 1.59 million.
The report also showed that the approach of harvest season impacted the price of food items significantly during the month, as the Food Sub-index, which increased by 15.8 per cent (year-on-year) in July, was actually lower by 0.5 points from rates recorded in June.
The prices of some food items within the food sub-index basket – milk, cheese and eggs; oils, fats and fruit – increased at a slower pace during the month, while the price of imported foods soared by 0.4 per cent points from June to 20.5 per cent in July.
Also, the total capital import into the country in the second quarter of the year fell to $647.1 million, representing 8.98 per cent decline from what was recorded in the first quarter of the year.
“The total value of capital imported into Nigeria in the second quarter of 2016 was estimated to be $647.1 million, which represents a fall of 8.98 percent relative to the first quarter, and a fall of 75.73 percent relative to the second quarter of 2015. This provisional figure would be the lowest level of capital imported into the economy on record, and would also represent the largest year- on-year decrease,” the NBS said.
During the month, energy and energy-related prices dominated the increase line as reflected in the Core sub-index which increased by 16.9 per cent, translating to 0.7 percent points from rates recorded in June (16.2 percent).
The NBS said the highest increases were recorded in the electricity, liquid fuel (kerosene), solid fuels, and fuels and lubricants for personal transport equipment groups.
Month-on-month headline index also increased at a slower pace for the second consecutive month in July as the index rose by 1.3 percent points from 1.7 per cent posted in June
The finance minister who was joined by the ministers of information, Lai Mohammed; solid minerals development, Kayode Fayemi; agriculture, Audu Ogbeh, and education, Adamu Adamu, said: “It is the worst possible time for us. Are we confused? Absolutely not. How are we going to get ourselves out of this recession? One, we must make sure that we diversify our economy. There are too many of us to keep on relying on oil. We can see what happened at the output data of the oil and gas sector.”