Stories by Bimbola Oyesola 08033246177

The Nigerian Employers Consultative Association (NECA) has warned that the economy can relapse into recession if urgent policy decisions are not adhered to as the economy is fragile despite exiting recession.

It said though the National Bureau of Statistics (NBS) asserted that the nation is out of recession, data revealed that several sectors are still in recession.‎

NECA President, Larry Ettah said this at the weekend in Lagos at its third quarter press conference on the state of the Nigerian economy.

Ettah said the three sectors, from NBS data that recorded strong growth in the second quarter to lift the economy out of recession are the Finance and Insurance (10.45%), Agriculture (3.01%) and Crude petroleum and Natural gas (1.64%).

He said: “Other sectors were either too small or their growth rates too marginal for their growth of rates to matter,for instance, the manufacturing and construction grew at 0.64 per cent and 0.13 per cent which were more or less zero growth; solid minerals which grew at 2.28 per cent is only an insignificant 0.13 per cent of the GDP.

“On the other hand, the majority of the sectors, including several of the large ones remained in recession, trade sector contracted by 1.62 per cent in Q2,2017 as did information and communications at 1.15 per cent, accommodation and food services known as hotels and restaurants at 4.05 per cent, real estate (3.58%), professionals (1.72%), education (1.34%), health (0.96%) and arts, entertainment and recreation (0.62%)”.

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Ettah said the recession exit was significantly accounted for by the growth recorded in the crude petroleum and natural gas sector from -15.6 per cent in Q1 to a 1.65 per cent growth in Q2, but for this 17.24 per cent point change in the crude oil and gas sector, the country will still be in recession now.

“More worrying in the sub-text of our exit from recession are some of the underlying trends, many of which are negative, most remarkably, the rate of growth of our aggregate non-oil economy retarded from 0.72 per cent in Q1 to 0.45 per cent in Q2, confirming that the recovery is driven simply by higher oil prices and production, and some of the by-products of that, greater FX liquidity and a slowing down of non-food inflation as FX rates moderated”.

Continuing, he said the manufacturing sector growth worsened from 1.36 per cent in Q1 to 0.64 per cent in Q2 despite improved forex supply to the market; construction sector growth declined marginally from 0.15 per cent to 0.13 per cent.‎

He said their review of the NBS GDP data shows that the marginal growth recorded in Q2 2017 is weak and fragile and additional measures are required to ensure growth is sustainable and the economy does not relapse into recession.‎

“NECA noted that against the population growth rate of 3.2 per cent, any GDP growth lower than 2 per cent makes no dent in Nigerian poverty, unemployment and inequality and is insufficient to ensure business growth and profitability, thereby urged economic planners to adopt measures to attain the ambitious growth targets stated in ERGP though it fear that the 2.19 per cent growth target in ERGP for 2017 appears unattainable.

“Higher growth of the GDP is contingent on attracting private foreign capital into sectors, infrastructure and markets as the beginnings of another political cycle towards 2019 mean that aggressive policy may not be likely”,  he concluded.