- NECA Faults NBS 2.19 Percent Growth, Says Economy Still in Recession
The Nigerian Employers Consultative Association (NECA) has faulted recent report by the National Bureau of Statistics (NBS) that Nigeria had exited recession, saying the economy was still in the woods.
Speaking in Lagos recently, its President, Larry Ettah, said major policy responses must be considered to ensure robust and sustainable growth, as well as effective implementation of the Economic Recovery and Growth Plan (ERGP).
Dissecting the report, Ettah observed that while it was positive that headline year-on-year inflation had moderated from 18.72 per cent to 16.05 per cent largely due to base effects (high base occasioned by shock to energy prices in 2016), several components of inflation still remained high.
He said other components that remained high include clothing and footwear at 15.8 per cent, education 15 per cent, imported foods 14.1 per cent, furnishings and household equipment maintenance 12.3 per cent, transport 11.7 per cent and health 10.3 per cent.
He noted that the review of the NBS Gross Domestic Product (GDP) data showed that the marginal growth recorded in the second quarter (Q2) 2017 was weak and fragile, stressing that additional measures were required to ensure sustainable economic growth to the extent that the economy does not relapse into recession.
“We recommend strong implementation of the ERGP to boost local and foreign investors’ confidence in the Nigerian economy and generate additional investments, which appears critical to building a sustainable recovery.
“We note that against our population growth rate of 3.2 per cent, any GDP growth lower that two per cent makes no significant impact on poverty, unemployment and inequality and is insufficient to ensure business growth and profitability.
“We urge economic planners to adopt measures to attain the growth targets stated in the ERGP. Already, we fear that the 2.19 per cent growth target in ERGP for 2017 appears unattainable,” Ettah said.
He pointed out that the NBS report for Q2 confirmed the dire situation in most economic sectors including manufacturing, trade, telecommunications, hospitality, construction, real estate, transport and professional services.
Ettah added that it also showed the poor state of the country’s social sector, as shown by the recession in education and health sectors.
He stressed that it was clear that policy responses were yet to reverse these negative trends.
“We are of the opinion that government needs to adopt specific, targeted and effective policies to attract and promote private capital investments in the Nigerian economy, especially infrastructure and industry.
“So far, it does not appear as if the rhetoric in ERGP to make markets work and leverage private capital as the engine of growth, has been matched by appropriate policy responses.
“With regard to inflation, we are worried by the continued rise in food prices with domestic food inflation reaching 20.3 per cent in July 2017, according to NBS data,” he stated.