By Omodele Adigun
As the nation gradually emerges from its worst recession in recent times, the Federal Government still has a lot of work to do in empowering the citizens as currency in circulation dips to an all time low of N1.77 trillion from N22.54 trillion witnessed last year, statistics from the Central Bank of Nigeria(CBN) has shown.
This may have explained the cash crunch which most Nigerians are experiencing as disposable income has been wiped off and low purchasing power is now the order of the day in most households
For instance, the currency in circulation in April, May and June, the three months that make up the second quarter when the recession ended, declined from N1.976 trillion to N1.898 trillion and N1.874 trillion in that order, down from N20.728 trillion, N20.722 trillion and N22.078 trillion recorded the same period last year.
But last July, the first month after the recession, the currency in circulation-N1.77 trillion -almost paled into insignificance when compared with the more than N22.535 trillion recorded same period in 2016.
The first three months of this year fared better as N1.995 trillion, N1.979trillion and N1.984 trillion circulated in the economy as against the 2016 positions of N19.800 trillion, N20.621trillion and N20.470 trillion respectively.
Currency in circulation, according to Wikipedia , an online dictionary’, is the total value of currency that has ever been issued minus the amount that has been removed from the economy by the central bank.
Recall that the National Bureau of Statistics(NBS) last Tuesday said the nation recorded an aggregate GDP(Gross Domestic Growth) of N26.986trillion in the second quarter of the year to exit recession as against the figure recorded in the corresponding period of 2016 which stood at N23.548trillion, resulting in a nominal growth of 14.6 per cent.
It explained further that the economy grew in the second quarter 2017 by 0.55 per cent from -0.91 per cent in the first quarter of the year and -1.49 per cent in the second quarter of 2016, which in effect means that the economy has exited recession after five successive quarters of contraction.
But during the period, the total currency in circulation stood at a little over N5.747trillion, a far cry from the N63.538trillion cumulatively chalked up from April to June 2016.
The data must have prompted a Development Economist and Economy analyst, Mr Odilim Enwegbara, to question the indices used by NBS to justify the country’s exit from the recession,saying “an average man has not got a job and those working have not got their salaries.”
He added: “I dont agree in principle that we have exited recession.To come out of recession, you need two consecutive growths in GDP,just the same way you have two consecutive negative growths to slip into recession.There are two types of growth, which the economy can witness: vertical and horizontal economicgrowth in combination. When you have a vertical economic growth, the economy can be growing without trickling down, without real growth.If the growth is a vertical growth, it has a multiplier effect without a trickle-down effect.But if it is a horizontal growth, it is a more inclusive growth because we have both trickle-down and multiplier effects.
“So I dont know the type of growth we have or what has generated thegrowth. Is it improvement in power? Is it improvement in infrastructure? Is it real sector growth that has driven the economy? Is it financial speculation? Is it possible that we have borrowed money to inject into the economy so that we are witnessing a growth? Is it inflation-driven growth? You may have a growth but inflation can eat up the whole growth,”he added.
Recently,the Minister of Agriculture and Rural Development, chief Audu Ogbe, was quoted as saying: “We are not happy that many Nigerians cannot buy food. We have no shortage of food anywhere in the country.But the prices are a bit high”.
He explained that some factors that led to the high prices of food items in the country include bad road network to transport food items frm one point to another.
“Roads are bad and trasporters will tell you that it costs high to move food from one place to the other.I was in Ekiti recently.A tuber of yam I saw that was sold for N300 was sold forN1500 in Lagos”.
Explaining why food prices are still high, the Statistician General and CEO of NBS,Dr Yemi Kale, said there is aproblem with the distribution across the country.
He stated that Nigerians are not feeling the real impact of the positive economic growth rate on their lives because the economy is still largely oil-driven.
He added: “There are different stages Nigeria must go through before the masses will feel the effects of going out of recession. Out of recession is the first step which is very important.Then the country can talk of economic recovery, which is going back to where Nigeria was before the recession. Recession is just a technical word; we are comparing 2017 and 2016.
“Recession is not about the price of your goods, not whether unemployment is going up or down; not whether you have quality education; it is purely your gross domestic product; your output of goods and services in the economy.”