As the year 2017 winds to a close and a new year takes of, it is the norm for pundits to review the previous year and forecast how the sectors of the economy may likely respond to business as the country enters into the current year. Since assessing the past sets the direction for the future, OYENIRAN APATA, JUSTUS ADEJUMOH, MOHAMMED SHOSANYA, NKASIOBI OLUIKPE and ANDREW UTULU in the following exercise, did an appraisal and economic preview of major sectors that may shape Africa’s largest economy in the next 351 days.
As the year 2017 rolls by, high expectations are at the uppermost in the minds of the stakeholders who want to see the reaction of the economy as the country enters the current year. Stakeholders in business sector of the economy are of the opinion that the growth recorded by the country in 2017 remains largely volatile and thus could give in to shocks.
Though the country in the out gone year exited the negative territory as Gross Domestic Product (GDP) that grew by 0.55% in the second quarter of 2017, the third quarter report by the National Bureau of Statistics (NBS) says the nation’s Gross Domestic Product (GDP) grew by 1.40 per cent year-on-year in real terms in the 3rd quarter.
The Bureau stated that the figure showed the second consecutive positive growth since the emergence of the economy from recession in the second quarter. It stated that the growth was 3.74 per cent points higher than the rate recorded in the corresponding quarter of 2016, which was –2.34 per cent.
The second quarter was revised following revisions by the Nigerian National Petroleum Corporation (NNPC) to oil output and hence led to revisions to Oil GDP. Quarter on quarter, the bureau stated that the real GDP growth was 8.97 per cent.
According to the report, the broad classification into the oil and non-oil sectors will give a clearer depiction of the Nigerian economy. In the period under review, the report stated that oil production was estimated at 2.03 million barrels per day (mbpd) on average.
According to NBS, this was 0.15 million barrels higher than the revised daily average production recorded in the second quarter of 2017 (revised from 1.84 mbpd to 1.87 mbpd). It further noted that oil production during the quarter was higher by 0.42 million barrels per day relative to the corresponding quarter in 2016, which recorded an output of 1.61 mbpd.
The report said the non-oil sector, was largely driven in the quarter under review mainly by Agriculture (Crop), other services and Electricity, gas, steam and air conditioning supply. In real terms, the report stated that the sector contributed 89.96 per cent to the nation’s GDP.
It, however, stated that the figure was lower than the share recorded in the third quarter of 2016 (91.91 per cent) and in the second quarter of 2017, which was 90.96 per cent.
Conversely, the real sector especially sectors such as trade, manufacturing, finance/insurance and information technology is yet to recover fully.
As the production manufacturing index, external reserve, nominal currency and price stability have improved, the labour force participation remains weak as about four million Nigerians were reported to have lost their jobs in 2017 alone.
The return of Nigerians held captive in Libya and others languishing outside the shores of the country are indications that all was not well with the country in employment generation.
Unemployment Hit The Roof
Unemployment could further heighten migration outflows thus giving a negative impression to the growth potential on the long-run due to substantial human capital flight.
Labour market throughout the year as the number of unemployed rose from 11.92 million in the first quarter of this year to 13.58 million and 15.99 million in the second and third quarters respectively.
It said between the second quarter and third quarter, the number of economically active or working-age population (15 – 64 years of age) increased from 110.3 million to 111.1 million.
The NBS report said the increasing unemployment and underemployment rates imply that although Nigeria’s economy is officially out of recession, the domestic labour market is still fragile and economic growths in the past two quarters in 2017 have not been strong enough to provide employment in Nigeria’s domestic labour market.
It reads in part, “The labour force population increased from 83.9 million in Q2 2017 to 85.1 million in Q3 2017. The total number of people in full-time employment (at least 40 hours a week) declined from 52.7 million in Q2 2017 to 51.1 million in Q3 2017.
“The unemployment rate increased from 14.2 per cent in Q4 2016 to 16.2 per cent in Q2 2017 and 18.8 per cent in Q3 2017. The number of people within the labour force who are unemployed or underemployed increased from 13.6 million and 17.7 million respectively in Q2 2017, to 15.9 million and 18.0 million in Q3 2017.
According to NBS during Q3 of 2017, 21.2 per cent of women within the labour force that were between the ages of 15 years and 64 years and willing, able, and actively seeking work were unemployed, compared with 16.5 per cent of men within the same period.
Strike Stifles Manpower Development In Education Sector
Furthermore, the labour market in the education sector specifically was volatile all through the year. It was characterised by strikes at all levels of education owing to unpaid salaries and allowances.
To the specifics, agitations at the ivory towers borders on; unpaid Earned Academic Allowances (EAA), funding of Universities, the shortfall in university lecturers’ salaries and non-payment of salaries in staff primary schools since December 2015; Staff salaries, underfunding of state-owned universities by governors, TSA and University Autonomy.
Others are a renegotiation of the 2009 FGN-ASUU agreement, amendment of JAMB, NUC and National Minimum Standards and Establishment of Institutions Acts of 2004.
Though issues of TSA have been settled a number of other demands remain unresolved. To close the year, another tranche of N23billion released by the government had been a subject of controversy yet to be resolved by the authorities.
At the basic education level, it was a gamut of confusion as the umbrella body of teachers in the country; the Nigerian Union of Teachers (NUT) was preoccupied with the mounting salary arrears in the states. Kogi, Osun, Oyo specifically were singled out as debtor states.
In Mallam Nasir El-Rufai’s Kaduna State, the union is neck deep in battle with the government as it commenced a mass sack of about 22,000 teachers who scored below 75 per cent in a competency test. The furore created by the sack fever snowballed into the New Year as workers in the state commenced the boycott of classrooms.
The Nigeria Labour Union (NLC) has expressed solidarity with teachers in the state who are presently on strike over the sack of their colleagues.
Though the aviation industry had been accident-free in the last two years, it was not spared of the ups and downs the economy witnessed during the period. Activities in the sector started on a low key no thanks to the economic recession of 2016, which had a spillover into 2017.
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Author: Oyeniran Apata, Justus Adejumoh, Mohammed Shosanya, Nkasiobi Oluikpe, Andrew Utulu