Mrs. Kemi Adeosun, the Minister of Finance, yesterday, while speaking with State House Correspondents after the Federal Executive Council meeting held at the Presidential Villa in Abuja, admitted that Nigeria is currently in its worst possible time.
Nigeria’s foreign reserves stood at $26.2billion at the end of July, but fell by about 2.86% to $25.45billion according to the report released by the Central Bank of Nigeria on August 29, 2016.
Currently the naira has fell to an all time low of about N420 to a dollar in the parallel market.
Senator Ben Murray-Bruce’s tweet on the current state of the nation’s economy;
Aero, Innoson, shut! 14 airlines left. 220 firms shut. 4.5 million jobs lost. Naira at 420 to $1. Recession is a reality not just a word!
— Ben Murray-Bruce (@benmurraybruce) September 1, 2016
According to a statement from the State House by Laolu Akande, he said;
“The just released GDP figures for the 2016 second quarter by the National Bureau of Statistics while confirming a temporary decline, has (sic) also indicated an (sic) hopeful expectation in the country’s economic trajectory.”
The Gross Domestic Product (GDP) figures for the 2016 second quarter released by the National Bureau of Statistics (NBS) shows that Nigeria is now officially in recession as it has recorded two consecutive quarters of negative economic growth. This is the first major recession in 29 years for the Africa’s largest economy.
According to the report released by the NBS, inflation has rising to 17.1% from 16.5%, unemployment rate increased by 13.3% from 12.1% and investment inflows dropped to the lowest level at about $647.1million from $710million.
“It’s the worst possible time for us. Are we confused? Absolutely not,” the Minister of Finance said.
According to her, the government is not confused, the plan and strategy is still the way forward she noted.
“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.”
The NBS latest report reads below in part;
“In the second quarter of 2016, the nation’s Gross Domestic Product declined by -2.06 per cent (year-on- year) in real terms.
“This was lower by 1.70 percentage points from the growth rate of -0.36 per cent recorded in the preceding quarter, and lower by 4.41 percentage points from the growth rate of 2.35 per cent recorded in the corresponding quarter of 2015. Quarter-on-quarter, the real GDP increased by 0.82 per cent.”
Most of the sectors recorded huge declines in their respective GDP growth rates. Some of which as seen on Punch Newspaper are, oil, which recorded a negative GDP growth rate; manufacturing, -1.02 per cent; financial sector, 2.8 per cent; transport, 6.18 per cent; construction, 3.77 per cent; and real estate, 2.12 per cent.
“Nominal GDP growth in manufacturing in the second quarter of 2016 was recorded at negative 1.02 per cent (year- on-year), 1.09 percentage points lower than the 0.07 per cent recorded in the corresponding period of 2015.
“This was partly as a result of higher operating costs related to higher costs of inputs and alternative energy sources. Growth was 1.96 percentage points higher than the first quarter of 2016, when it was 2.98 per cent.”
“During the period under review, oil production was estimated at 1.69 million barrels per day, 0.42 million barrels per day lower from the production in the first quarter of 2016.
“As a result, real growth in the oil sector was negative 17.48 per cent (year-on-year) in the second quarter of 2016.
“Growth declined by 10.68 percentage points and 15.59 percentage points relative to growth in the second quarter of 2015 and the first quarter of 2016, respectively.”
“The second quarter saw the economy enter into the first recession during the rebased period, according to the technical definition of two consecutive periods of decline. This may suggest less profitable opportunities for investment.
“In addition, in the second quarter, there was considerable uncertainty surrounding the future exchange rate policy, which may have deterred investors. The naira was allowed to depreciate towards the end of the quarter. These factors were likely to have contributed to the record decline in capital importation.”
“The number of underemployed in the labour force (those working but doing menial jobs not commensurate with their qualifications or those not engaged in fulltime work and merely working for few hours) increased by 392,390 or 2.61 per cent, resulting in an increase in the underemployment rate to 19.3 per cent in Q2 2016 from 19.1 per cent in Q1 2016.
“During the reference period, the number of unemployed in the labour force increased by 1,158,700 persons, resulting in an increase in the national unemployment rate to 13.3 per cent in Q2 2016 from 12.1 in Q1 2016.”
“In July, the Consumer Price Index, which measures inflation, increased by 17.1 per cent (year-on-year), 0.6 percentage points higher from the rate recorded in June (16.5 per cent).
“The pace of the increase in the headline index was however weighed upon by a slower increase in three divisions; health, transport and recreation and culture divisions.
“Energy and energy-related prices continue to be the largest increases reflected in the Core sub-index. In July, the Core sub-index increased by 16.9 per cent during the month, up by 0.7 per cent points from rates recorded in June (16.2 per cent).”