The recent data released by National Bureau of statistics (NBS) that Nigeria has exited from recession has continued to raise a lot of issues in the nation’s fi nancial system. AMAKA IFEAKANDU, Lagos, BASHIR MOHAMMED, Kano and PATRICK ANDREW, Abuja, report
Although some economists and analysts described the development as a step in a right direction, others said that the impact is marginal and the economy is still weak battling with double digit infl ation rate.
Commenting on the issue, a fi nancial analyst, Mr Ifeanyi Okolo admitted that NBS report on Nigeria economic growth was major breakthrough that would encourage improvement in every sector of the economy.
According to him, it is a major breakthrough that we are coming out of positive territory after fi ve quarters of negative growth.
But comparing Nigeria with that of South Africa it means we need to work harder. We need to improve in some areas.
South Africa recorded negative growth two quarters but they are back at 2.3 per cent.
” He said that the country would perform much better at the end of third quarter if they extend more credit to the real sector of the economy and agricultural sector to increase food production.
Some capital market operators on the other hand insisted that Nigeria’s fortune still dependent on oil – Capital market Th ey said that the exit from recession in the second quarter of the year was in line with expectation on the ground that there has been consistent reduction in contraction in the last three quarters.
Th ey stated that the growth recorded in the fi nancial services Industry was as a result of rebound experienced in the capital market as well as the high interest rate.
A capital market analyst, Mr Chikwudi Okeke said although expection was high that Nigeria would exit from recession in second quarter of this year but the full recovery of the country’s economy is still tied to the oil sector.
He said the growth was as result increase in the price of oil adding that if the oil price crashes again tomorrow the economy would start struggling to survive.
He said: “ before now a lot of people had actually predicted that Nigeria will come out of recession in the Q2 this year, which has actually come to pass given the improvement in the GDP but we need not to celebrate yet.
We need to diversify the economy to make more earnings from non oil sector.
“ He said that the economy would do better if goverment can address the contraction in the oil and gas and mining sectors.
A capital market operator who pleaded anonymity said, a lot of the recovery has to do with the non-oil component of the GDP.
He, however, said that the services component is not yet where it is supposed to be and urged the government to focus more on in the sector.
“He said that fi nancial services sector contribution to the GDP was because of the high interest rate regime that made a lot of banks to be very active in placements.
He said banks were very active in treasury operations and foreign transactions due to the liquidity in the foreign exchange, FX, market in the quarter.
Th e Lagos Chamber of Commerce and Industry said that the news of the country’s exit from recession is welcome development.
The Director-General, LCCI, Mr. Muda Yusuf, said that the development was a positive signal to the global investing committee.
In his explanation, he said it will improve the perception of the economy, especially by foreign investors.
According to him, “Th e economy will no longer be characterised as an economy in recession.
It will also improve the status of the country as an investment destination.
“Th is will boost investors’ confi dence.
Th e exit from recession is also an indication that some of the policy actions of the government have impacted positively on the economy.
” To the Minister of Information and Culture, Alhaji Lai Mohammed, was apparently reacting to the news of Nigeria’s exit from recession which he said is a bad omen to the cabal fi ghting President Muhammadu Buhari’s administration, adding that they were only shedding crocodile tears in the face of their spectacular failure.
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The National Bureau of Statistics (NBS) had on Tuesday revealed that the country has been officially out of recession, the report that was greeted by criticisms from the oppositions of the federal government.
Speaking at the opening ceremony of the 4th Annual Conference of the Association of Communication Scholars and Professionals of Nigeria (ACSPN) held at Green Desert Hotel in Kano yesterday, Mohammed said while the news was good to Nigerians, it was as well bad to reactionary forces According to him, mischief makers were always bent on painting the Buhari administration black through fake news and misinformation, adding that the government would not relent in its eff ort to tame the scourge of hate speech and fake news in a bid to save the nascent democracy.
Similarly, the Acting Chairman of the Fiscal Responsibility Commission (FRC), Mr Victor Muruako, has advised the federal government to take advantage of the exit from recession to focus deftly on the implementation of the Economic Recovery and Growth Plan (ERGP).
According to him, instead of resting on its oars, the government should restrategised and commit to curbing rising infl ation rate, stimulate construction of facilities and fully engage the agriculture sector as panacea for improved foreign exchange earnings and job creation.
Reacting yesterday in Abuja to the NBS announcement of Nigeria’s exit from recession, Muruako said that the target should go beyond getting the nation out of recession but maintaining a healthy economy that guarantees stable production and employment.
“It is a good thing we are out of recession and we are very happy that the conscious eff orts of the president and the economic team were able to bring us out of it.
“We thank God the economic team was able to come out with a plan which eventually brought us out of it.
“It was one of those strategies meant not just to come out of recession but also to ensure the growth of the economy because the real challenge is not coming out of recession but growing the economy.
“We must commend the government when they get it right and this is a good development that calls for cheers and celebration,’’ he said.
Further, he said the ERGP, which was launched in April by President Muhammadu Buhari, and seeks to restore the nation’s economic status following the high rate of infl ation and recession, deserves full implementation to ensure sustained economic health.
Similarly, Al-Hikman University, Ilorin, Head of Department Department of Economics, Dr Remi Medupin, said that the exit from recession should be evident in the living condition of the people.
On his part, former presidential candidate of the National Conscience Party (NCP), Martin Onovo, believes the federal government deceived Nigerians by saying the country has exited economic recession.
Onovo, who appeared on Politics Today, a Channels Television programme said Nigeria cannot be out of recession and still face increased unemployment rate.
“Obviously, the ruling party is playing with words.
Now, when you have a recession that is complicated by rising unemployment and rising infl ation, that is stagflation.
So it is deceitful in the fi rst instance to claim that we exited the recession,” he argued.
“When you have a GDP decline in two consecutive quarters, that is a recession.
What has happened in Nigeria is that we have had the decline consistent for fi ve quarters, that in the minimum is not a recession but a depression.
” Th e former presidential candidate, however, said the country had only gone out of a “technical recession”, insisting that Nigeria’s economic crisis was beyond the recession.
He accused the government of being corrupt, noting that it must invite ethical people and encourage merit to tackle the challenges facing the nation’s economy.
“Technically, we just exited a ‘technical recession’ and the actual situation has gone beyond a recession, economic depression is a sustained recession.
Th e government has driven the economy to a bottom.
