RECESSION: Presidency Says There Is Hope, Laments High Inflation, Unemployment

The Presidency has admitted that the rate of inflation and unemployment in

the country remains “stubbornly” high but assures of hope in the face of

The Special Adviser to the President on Economic Matters, Dr Adeyemi
Dipeolu, admitted this in a statement on the latest National Bureau of
Statistics’ report.

Dipeolu’s statement was on Wednesday made available to State House
reporters by the Senior Special Assistant to the Vice President on Media
and Publicity, Mr. Laolu Akande.

Dipeolu stated: “The inflation rate remains high, but the good news is
that the month-on-month rate of increase has fallen continuously over the
past three months. Unemployment remains stubbornly high which is usually
the case during growth slowdowns and for reasons of a structural nature.”

He, however, noted that barring unforeseen shocks, the areas given
priority by the Federal Government “are beginning to respond with
understandable time lags to policy initiatives.”

According to him, as the emphasis on capital expenditure begins to yield
results and the investment/GDP numbers increase, the growth rate of the
economy is likely to improve further.

He said as these trends continued, “the outlook for the rest of the year
is that the Nigerian economy will beat the International Monetary Fund’s
prediction of 1.8% for the full year 2016.

“The IMF had forecast a growth of -1.8% for 2016. However, the economy is
performing better than the IMF estimates so far. For the half year, it
stands at -1.23% compared to an average of -1.80% expected on average by
the IMF.

“What is more, it is likely the second half will be better than the first
half of 2016. This is because many of the challenges faced in the first
half either no longer exist or have eased.”

Dipeolu analysed thus “The just recently released data from the National
Bureau of Statistics showed that Gross Domestic Product declined by -2.06%
in the second quarter of 2016 on a year-on-year basis.

“A close look at the data shows that this outcome was mostly due to a
sharp contraction in the oil sector due to huge losses of crude oil
production as a result of vandalisation and sabotage.

“However, the rest of the Q2 data is beginning to tell a different story.
There was growth in the agricultural and solid minerals sectors which are
the areas in which the Federal Government has placed particular priority.
Agriculture grew by 4.53% in the second quarter of 2016 as compared with
3.09% in the first quarter.

“The metal ores sector showed similar performance with coal mining,
quarrying and other minerals also showing positive growth of over 2.5%.
Notably also, the share of investments in GDP increased to its highest
levels since 2010, growing to about 17% of Gross Domestic Product. The
manufacturing sector, though not yet truly out of the woods, is beginning
to show signs of recovery; while the service sector similarly bears

“Nevertheless, the data already shows a reduction in imports and an
increase in local produced goods and services and this process will be
maintained although it will start off slowly in these initial stages
before picking up later.”

In his own remarks, the vice president’s spokesman, Akande, said though
the just released GDP figures by the NBS for the second quarter confirmed
a temporary decline, it also indicated a hopeful expectation in the
economic trajectory.

“Besides the growth recorded in the agriculture and solid mineral sectors,
the Nigerian economy, in response to the policies of the Buhari
Presidency, is also doing better than what the IMF had estimated with
clear indications that the second half of the year would be even much
better,” he stated.

Akande said the Presidency would continue to work diligently on the
economy and engage all stakeholders to actively pursue beneficial policy
initiatives and deliver dividends to Nigerians.

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