NIGERIA is officially in recession according to the latest report by the National Bureau of Statistics (NBS) which confirmed that the economy shrunk by 2.06% during the second quarter of 2016.
Technically, a recession is defined by economists as two successive quarters of negative growth and with Nigeria now having witnessed this as a result of a collapse in global oil prices, the outlook is bleak. Yesterday, the NBS confirmed the public’s worst fears that the delayed response by the Muhammadu Buhari administration to the structural adjustments needed to avert an economic crisis has resulted in a contraction of gross domestic product (GDP).
Earlier this year, the government tried to dismiss International Monetary Fund (IMF) suggestions the economy will contract by -1.8% this year. However, things are looking dire as growth figures show that the 2.06% contraction of the second quarter follows the negative growth of 0.36% recorded in the first quarter of 2016.
There was further gloom in the NBS report as it showed that the increase in food prices and imported items pushed up the Consumer Price Index, which measures inflation, to 17.1% in July, from 16.5% in June. Also, the national unemployment rate rose to 13.3% in the second quarter from 12.1% in the first three months of the year, 10.4% in the fourth quarter of 2015, 9.9% in the third quarter of 2015 and 8.2% in the second quarter of 2015.
However, labour productivity increased by 5.3% to N637.5 in the second quarter of 2016, from N605.27 in the previous quarter. Quarter-on-quarter, real GDP increased by 0.82% but in normal terms, the GDP in the second quarter stood at N23.48trn at basic prices, which was 2.73% higher than estimates in the second quarter of 2015 of N22.85trn and lower than the rate recorded in second quarter of 2015 by 2.44%.