New Telegraph

FG: Economy back on track as GDP growth rate shows positive signs

Analysts

Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, yesterday disclosed that the Gross Domestic Product (GDP) growth rate of 5.01 per cent recorded last week was an indication that the economy had returned to its pre- COVID-19 position with prospects of further recovery.

 

Ahmed, who briefed journalists on the state of the economy, expressed confidence that the growth rate of the economy could    hit three pe rcent by the end of the year.

 

She recalled that by the second quarter of this year, the aggregate GDP was 2.7 per cent, adding that the leap to 5.01 per cent was an indication that the various measures put in place by the Federal Government had begun yielding positive results.

 

The briefing, which held at the National Press Centre,  had in attendance, the Minister of Information, Alhaji Lai Mohammed; Minister of State, Budget and National Planning, Prince Clem Agba and the Director General, National Bureau of Statistics (NBS). According to Ahmed, the Medium Term Development Plan and the Nigeria Agenda 2020 have projection of seven percent medium term growth.

 

She explained that the positive growth being recorded in the economy followed government’s proper assessment of the situation during the negative growth period and a clear plan to reverse the trend through policies and programmes that stimulate economic growth.

 

“When you have a set back, what you do is to sit back, reassess your situation, taking into cogni-  sance your current reality, plan to cone back to where you were and then move forward from there.

 

We are back to where we were before COVID-19 happened and there is every strong indication that the growth trajectory will be a positive one,” she said. On complaints that the growth of the economy was not having positive impacts on the lives of citizens, the minister explained that it would take a while before the gains would trickle down to the people.

 

“In terms of the impacts on the lives of the citizens, until we get to a growth rate that is significantly higher than the birth rate or population rate, the impact will not be felt by every Nigerian.

 

“But you will begin to see the impact on industry and services. What that means is that there will be employment to reduce the unemployment level and the consumption level will increase because there will be more funds in the hands of the people. It is a gradual process, but we will reach our growth aspirations.

 

“The inflation has started trending downwards but it will also take a bit of time before prices adjust. When you look at the market, the prices if some major commodities such as corn and guinea corn have started going down. “It may have to do with the harvest season but also, it doesn’t change overnight.

It is a process. “There are some good that are more impacted while some are less impacted. So, we will soon begin to see a decline in food infla  tion which unfortunately, is the major driver of inflation in the country,” she said.

 

The minister acknowledged the concerns expressed by the Manufacturers Association of Nigeria (MAN) on the slow pace of growth in the manufacturing sector and pledged the commitment of government to continue to engage with the organisation in resolving their challenges.

 

She said with the coming into force of the African Continental Free Trade Area (AFFTA), manufacturers would have to contend with both internal and external forces as Nigeria embraces the continental free trade regime.

 

Ahmed equally admitted that availability of stable power at reasonable cost had been one of the key challenges of the manufacturing sector in Nigeria.

 

She assured that the Federal Government was already working through the Presidential Power Initiative to provide the necessary investment in the electricity distribution network to improve power capacity in the country.

 

Minister of State, Budget and National Planning, Prince Clem Agba, advised Nigerians to be more positive about the current developments in the economy.

 

Agba said that the recent growth recorded was exciting, given the fact that Nigeria had almost five quarters of negative GDP growth before it sank into recession in 2016.

 

He said that since pulling out of recession, Nigeria had 17 quarters of positive GDP growth before the outbreak of COVID-19.

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