Let me congratulate Nigerians over the good news.According to the National Bureau of Statistics (NBS), the economy grew by 0.55 percent in GDP terms for Q2 2017. While this is good news for the good people of Nigeria, it be very sad news for the purveyors of fake news, disinformation and hate speech.
Why? Because part of the reasons they have devoted their energies to spreading lies about the Administration is to pull the wool over the eyes of Nigerians and give the impression that the Administration is not working. Taking Nigeria out of recession did not happen by accident. It is the culmination of months ofhard work by the Administration and fidelity to its well-articulated economic policies, especially the Strategic Implementation Programme (SIP) and the Economic Recovery and Growth Plan (ERGP) that was launched on 5th April, 2017.
Though Nigeria has been on the path towards recession since mid-2014 due to a combination of factors, including the total dependence on a mono product – oil – and the failure to save during the boom years, the country officially slipped into recession in the 2nd Quarter of 2016. Of course, as you all know, a recession is generally defined as two consecutive quarters of negative growth in Gross Domestic Product (GDP, which measures the economic performance of a country by how much production of goods and services it achieves, usually over the course of a year).
This recession presented a scenario of contracted GDP (0.67%), stagflation, which occurs when periods of low economic growth or Economic Contraction in GDP coincide with periods of elevated Inflation, which is often accompanied by high levels of Unemployment.
At the same time, inflation increased from 9% in Jan 2016 to 18.6% in December of the same year; unemployment rate rose above 14% and there was a massive foreign reserves decline But things are looking up now. For Nigeria to be out of recession means the Administration has take some right steps that have culminated in the good news that we are celebrating now. It didn’t just happen. Let me quickly run through some of those incrementally-positive steps that have brought us the good news.
GDP: The economy which had consistently slowed down since 2014 bottomed out in the third quarter of 2016 and has improved consistently since then. Gross Domestic Product (GDP), which has been declining since 2015, improved thereafter to -1.73% in Q4 2016, and -0.91% in Q1 2017. Finally, GDP grew by 0.55% on Q2 2017! This positive growth is attributable to both the oil and non-oil sectors of the economy. Growth in the oil sector, which has been negative since Q4 2015, was positive in Q2 2017. It rose by 1.64% as compared to -15.60 in Q1 2017, an increase of up to 17 percentage points. The non-oil sector grew by 0.45% in Q2 2017, a second successive quarterly growth after growing 0.72% in Q1 2017. In particular, improvement in the non-oil sector was driven principally by strong growth in agriculture and solid minerals sector, and reversal in the previous contraction of the manufacturing and construction sector.
This shows that the government’s economic diversification programme is working. The positive growth seen in agriculture when the rest of the economy was contracting was maintained at 3.01%, which is encouraging especially if seasonal factors are taken into account. Manufacturing growth was also positive at 0.64% and, although lower than the previous quarter’s growth of 1.36%, was an a noticeable improvement over the -3.36% experienced inQ2 2016 and a continuation of the turnaround of the sector. Similarly, another area of focus of this administration, which is solid minerals, has also grown strongly despite the recession in 2016, growing at an average of 5.63% between Q2 2016 and Q4 2016. In Q1 2017 however, the solid mineral sector grew significantly by 46%.
Also, the Creative Industry continues to do very well. The industry, which grew by 3.72% in 2016, performed even better and grew by 11.67% in Q1 2017. The economy has also witnessed areversal in the contraction in the manufacturing and construction sector. Overall, industry as a whole grew by 1.45% in Q2 2017 after nine successive quarters of contraction starting in Q4 2014.
INFLATION: The inflation rate rose astronomically in 2016 from 9.03% in January to over 18% by December 2016. This has however improved as the inflation rate has consistently declined every month since January 2017. It was 16% as of July 2017. Yes, food prices are still high, butthat is being addressed with appropriate monetary, fiscal and trade policies as stated in the ERGP. Our target is to take it down to about 11% by the end of the year and under single digits by 2020.
FOREIGN TRADE: Nigeria’s trade balance was negative for most of 2016. However, total exports for the period under review stood at ¦ 3,005.9 billion, while total imports stood at ¦ 2,286.5 billion. The rise in exports, coupled with a decrease in imports, brought the country’s trade balance to ¦ 719.4 billion during the period, up from ¦ 671.3 billion. This represents the second consecutive positive trade balance after 4 quarters of negative trade balance. More noteworthy is the improvement in the exports of agriculture, solid minerals andmanufactured goods which have been the focus of government.
CAPITAL IMPORTATION/FOREIGN DIRECT INVESTMENT: As the economy slowed down since mid-2014, foreign investment and capital inflows also slowed down. However, since the beginning of 2016 to June 2017, capital has begun to return to the Nigerian economy. The total value of capital imported into Nigeria in the second quarter of 2017 was estimated to be $1,792.3 million. This figure was $884.1 million more than the figure recorded in Q1 2017, a growth of 95.02 percent. Year on year, this was an increase of 43.6 per cent from the $1,042.2million recorded in Q2 of 2016.
FOREIGN RESERVES AND EXCHANGE RATE: Nigeria’s external reserves hit a 30-month high of $31.5 billion in July 2017, reversing a trend in a decline when it dropped to US$23.89 billion by October 2016. The steady upward trend in the reserves, especially since July 7th, 2017, was buoyed by improved foreign exchange inflow occasioned by positive developments in crude oil prices since early 2017 as well as improvement in the inflow of foreign capital as discussed earlier. The value of the Naira in the parallel market has appreciated significantly in recent times against the US dollar. It has appreciated from N520/$ as at 20th February 2017 to N392/$ in April and further to about N362/$ as at 17th August 2017 due to the continuous intervention by the CBN and improved Foreign Portfolio and Foreign Direct Investment flows, following the introduction of the Investors & Exporters forex window. However, the official exchange rate has been held at just above N305/$.
UNEMPLOYMENT: Current data on the country’s unemployment rate is still being awaited. However, from the available data, unemployment still poses a challenge. The rate increased from 13.9% in Q3 2016 to 14.2% in Q4 2016. The high increase is attributed to the high rate of our population growth and the contraction in growth in 2016. However, as the economy recovers, with private economic activities firming up, it is expected that unemployment rate will decline in subsequent quarters. Similarly, with the increased momentum in the implementationof the social intervention programmes (including the N-Power initiative) which started in Q4 2016, unemployment rate is expected to reduce. N power which is the job creation cluster for unemployed graduates, has 200,000 people employed, and 300,000 more are set to join.
NATIONAL HOME GROWN SCHOOL FEEDING PROGRAMME: Today 3,065,000 school children in 36 states are served one free meal a day in order to make learning more conducive. The School Feeding Programme has also employed 12,000 Cooks across the 36 States and FCT.
CONDITIONAL CASH TRANSFER: So far, over 30,000 households have benefited from the N5,000 monthly stipend under the programme.
GOVERNMENT ENTERPRISE AND EMPOWERMENT PROGRAMME: About 120,000 peoplehave benefited from the cooperative loans under the Programme. There is more good news. The Transportation and Storage sector contributed 1.33% to total GDP in Q1 2017, rose slightly from Q1 2016 and Q4 2016, with 1.20% and 1.19% respectively. Also, the power situation has improved, as power generation has increased from 2,690MW toover 6,000MW presently. Let’s not forget that despite the removal of fuel subsidy, queues have disappeared from filling stations nationwide. In fact, the NNPC announced on Sunday that its sustained strategic intervention in the efficient supply and distribution of petroleum products had led to a significant fall in the price of petrol, from 145 Naira to between 142 and 143 Naira per litre, across the country. Massive road and railway construction work across the country are bring back many jobs that have been lost in that sector. Remember that for three years before this government came in, contractors were not paid. That’s now history. These positive developments do not constitute news. That’s why they make up their own fake news, and engage in disinformation and hate speech. They believe that by seeking to overwhelm the polity with fake news, disinformation and hate speech, they can easily obliterate the glaring achievements of the Buhari Administration. We must not allow them to dominate the media space. This Administration is working and the results are showing.
Being the text of a speech by the Hon Minister of Information and Culture, Alhaji Lai Mohammed, at the 4th Annual Conference of the Association of Communication Scholars and Professionals of Nigeria, in Kano on Wednesday 6th Sept. 2017