Nigeria’s 2.25 per cent GDP underscores citizens’ worsening poverty rate – Expert - DAILY POST
An economic expert, Dr Boniface Chizea has said the 2.25 per cent slow of Nigeria’s Gross Domestic Product, GDP, underscores the worsening poverty rate of citizens.
Chizea made this disclosure to DAILY POST on Friday while reacting to the latest Gross Domestic Product Report by the National Bureau of Statistics, NBS.
On Thursday in Abuja, the NBS reported that Nigeria’s GDP grew by 2.25 per cent in the third quarter of 2022, representing a slow growth rate.
Reacting to the development, Chizea stated that with the Non-Oil sector contributing 94.34 per cent of GDP, while the Oil sector makes up the balance of 5.66%, the Nigerian economy is no longer oil-based.
He added that the country needs to get its leadership right in the forthcoming election, stability of foreign exchange market, subsidised energy cost, support the productivity sector and overcome insecurity to jump-start faster GDP growth.
“The Nigeria Bureau of Statistics in its report released on Thursday November 24, 2022 reported a slower growth of the Nigerian economy in the third quarter of the year 2022 and naturally there is some concern. Some cold comfort however is that the Nigerian economy has recorded positive growths in the last eight quarters signalling the fact that recession remains a distant possibility.
“But this report should not come to us as a surprise considering the ongoing Russia/Ukraine war which has had devastating consequences as it destabilised the world economy and has resulted in a spike in inflationary spiral across many countries of the world including the United Kingdom which is currently suspected might slip into recession.
“For Nigerians this underscores the worsening welfare conditions as most Nigerians today are really ravaged by poverty and are struggling to eke out a living. Therefore, not surprising the Bureau recently reported that using a multi dimensional index that 130 million Nigerians are poor! So much therefore about the talk of lifting 100 million Nigerians out of poverty over a period of ten years!
“It will be interesting to review the source of this reported growth. What is reassuring is that non oil now contributes 94.34% of GDP with oil making up the balance of 5.66%. This clearly informs us that we are not an oil based economy. Oil becomes prominent from the perspective that it contributes over 70% of government revenue and up to 90% of its foreign exchange income. This explains why oil is referred to as an enclave sector so insular. Even then the contribution of the oil sector has witnessed considerable decline as production levels have been negatively impacted due to massive and heartless theft which has made Nigeria unable to meet its OPEC production quota. The level production currently stands at 1.22 mbpd compared to 1.56 mbpd for the same period in 2021. There is also the lingering uncertainty as the Nigerian National Petroleum Company makes its hesitant transition to a publicly quoted company.
“Service sector of the economy has traditionally played a dominant role from the perspectives of sectoral contribution to GDP standing at over 50% with Information & Communications Technology contributing about 10%. The contribution of Agriculture is slightly down to 24% which is not surprising if we factor in the floods and the ongoing insecurity in the farm regions of Nigeria. Industry and construction adds up the remaining 11%.
“What to do to jump start faster growth in the land is well canvassed. We must get elections 2023 right otherwise the situation will deteriorate rapidly. There will be the urgent need to tackle head long insecurity which has lingered for too long in the country. There is a need to end promptly subsidy on the pump price of fuel. In fact we should be looking urgently in the direction of quick termination of fuel importation if Dangote Refinery can live up to its billing. There is also the need to address the instability with the rate of exchange of the Naira. Is it time to float the rate of exchange of the Naira?
“Nigeria somehow must revive production otherwise we might harvest unrest which the world is worried about because of our massive population”, he said.