Buhari’s economic adviser: Only major shocks can stop us from getting out of recession in 2017

Adeyemi Dipeolu, special adviser to President Muhammadu Buhari on economic matters, says if there are no major economic shocks in the Nigerian economy, it will get out of recession in 2017.

In his analysis of the statistics released by the National Bureau of Statistics (NBS), Dipeolu said the economy maintained path to recovery.

According to him, it is an encouraging indication of a steady, even if slow, progressive pace, adding that the Gross Domestic Product (GDP) figure shows that the Nigerian economy was emerging out of recession.

“The 2017 Q1 GDP figures released early Tuesday depicts an overall picture showing the economy is emerging slowly out of recession’’, he said.

Dipeolu noted that growth had continued in agriculture and a notable positive turnaround had also been recorded in manufacturing and non-oil sectors.

He, however, observed that slow down in negative growth rates was noticed in several more sectors.

“The latest figures released by the National Bureau of Statistics showed that the economy shrank by 0.52 per cent in the first quarter of 2017 (Q1 2017).

“Although the economy remains in recession, this is the strongest performance in five quarters and shows a significant turnaround from the low of -2.34 per cent reached in the third quarter of 2016 (Q3 2016).

“This is nearly two percentage point improvement. It also reflects the fact that the number of sub-sectors that experienced negative growth has almost halved falling from 29 sub-sectors for the whole of 2016 to 16 sub-sectors in Q1 2017″.

He observed that agricultural growth remained in positive territory although growing at a slower rate of about 3.4 percent due to seasonal factors.

He also said that growth in manufacturing on the other hand returned to positive territory after five quarters of negative growth.

It grew by 1.36 per cent in Q1 2017 after falling to a nadir of -7.0 per cent in Q1 2016.

Dipeolu hinted that the solid mineral sector continued to justify the priority given to it by the Federal Government with high double digit growth for metal ores at 40.79 per cent and quarrying at 52.54 per cent.

He said growth in the oil sector remained negative at -11.64 per cent although with over six percentage point improvement in its fortunes from the previous quarter.

“More significantly, the non-oil sector which accounts for about 90 per cent of GDP returned to positive growth although at a marginal level of 0.72 per cent in Q1 2017.

“This is the first positive growth in the non-oil sector since the last quarter of 2015.

“Headline inflation fell for the third month in a row to 17.24 per cent with core inflation also declining quite rapidly’’, Dipeolu noted.

He, however, said that food inflation remained of concern as it continued to trend upwards.

“This is mainly due to rising transport costs and other structural impediments to the movement of foods in the domestic market.

“The trade balance remained positive reflecting import contraction and relatively higher export revenues which grew year-on-year by up to 80.5 per cent. The overall picture that the figures show is that the economy is emerging slowly out of recession.”

“Barring major economic shocks, it should still be possible to restore growth this year as projected in the Economic Recovery and Growth Plan,” he added.

The major economic shocks Nigeria remains susceptible to is a slump in crude oil prices.