In spite of claims by various government officials that the country’s economy is one of the fastest growing in the world in recent times, the reality appears to be the reverse, as potentials of a declining real Gross Domestic Product (GDP) shows an aggregate basis growth of 6.17 per cent in the first quarter of 2012 as against 7.13 per cent in the corresponding quarter of 2011.
In recent times, the Minister of Finance and the Coordinating Minister for the Economy, Ngozi Okonjo-Iweala; the Central Bank Governor, Lamido Sanusi; the Minister of National Planning, Shamsudeen Usman; and Minister of Agriculture, Akinwunmi Adesina, have variously hailed the growth of the country’s economy at about 7 per cent as one of the fastest in the world.
But the dip in the GDP growth rate, which represents a decline of about 0.96 per cent, according to the National Bureau of Statistics (NBS), has been attributed to decreases in the performances of both the oil and non-oil sectors of the economy.
The NBS, in its report on the economy’s performance for the first quarter of the year, however said the result surpassed government’s earlier growth of 5.34 per cent forecast, which still reflects the resilience of the domestic economy to the depressive spill-over effects of the current debt and other economic crisis plaguing the advanced economies.
According to the NBS, despite the dip in GDP performance in the first quarter of the year, the economic fundamentals still portend improved growth rate for the economy in the second quarter of 2012 as a result of recent sectorial policies in the non-oil sector.
“The 0.96 percentage point decrease in real GDP growth recorded in the first quarter of 2012 was as a result of decrease in both oil and non-oil sectors (manufacturing, wholesale and retail, telecommunication, among others).
“The first quarter of 2012 witnessed a decline in economic activity due, largely, to the partial removal of subsidy on petrol, the subsequent civil protest and weaker consumer demand following the higher price levels across major segments of the economy.
“Higher costs of production and prevailing security concerns also contributed to the decline in growth rate of real GDP during the period. The nominal GDP for the first quarter of 2012 was estimated at N9,142,858.51 million as against the N8,311,227.61 million recorded in the corresponding quarter of 2011,” the Bureau said.
A sectorial breakdown on the performance indices shows that the oil sector’s contributions to the GDP decreased as crude oil production and associated gas components dropped by 2.32 per cent in real terms, when compared with the 0.05 per cent growth recorded in the corresponding period of 2011.
The average daily production in million barrels per day (mbpd) for first quarter of 2012 was 2.35 million barrels per day (mbpd) as against 2.51 mbpd produced in the corresponding period of 2011.
Similarly, although the non-oil sector continued to be a major driver of the economy, with overall better performance of about 7.93 per cent growth in real terms than the oil sector in the quarter under review, it still recorded 0.8 per cent decline when compared with the 8.73 per cent growth recorded in the corresponding period of 2011.
The statistics agency linked the slowdown in the sector’s growth with decrease in some of the non-oil sectors such as manufacturing and wholesale and retail trade, amongst others.
The NBS reported that in terms of agricultural output, the real agricultural GDP growth in the first quarter of 2012 stood at 4.15 per cent as against 5.54 per cent in the corresponding period of 2011, attributing the decline to the low activities by farmers during the period.
On the performance of the financial services sector, the report showed that the effects of the on-going reforms, particularly the Central Bank of Nigeria (CBN) and National Insurance Commission (NAICOM)’s interventions, have continued to yield positive results in stabilizing and maintaining improved performances in the sector.