FG attempts positive spin to discouraging report of shrinking economy

Discouraging growth reports from the National Bureau of Statistics (NBS) is being tweaked by the federal government to give Nigerians a cheer.
But one analyst, Mr. Joseph Inokotong, railed at the attempt at a positive spin to the bad situation. “Of what impact is the growth in the non-oil sector that government should be encouraged, when the economy is shrinking by 0.45%? They should stop unnecessary politicking; the corroding effect is devastating. Something is wrong with the system. Fix the economy,” he lashed out.
The Gross Domestic Product (GDP) grew at 1.50% in the second quarter (Q2) of this year, but it is a fall of 0.45% percent from what it was in the first quarter (Q1), according to the nation’s statistician.
The growth within the same period between April and June of last year was 0.72%.
But the NBS tried to be upbeat, just like Budget and National Planning Minister, Senator Udoma Udo Udoma.
Said the NBS, “For the first time since the exit from recession, growth was driven by the non-oil sector which grew by 2.05% representing the strongest growth in non-oil GDP since Q4 2015.
“Non-oil GDP growth which was -0.18% in Q1 2016, -0.38% in Q2 2016, 0.03% in Q3 2016, -0.33% in Q4 2016, 0.72% in Q1 2017, 0.45% in Q2 2017, -0.76% in Q3 2017, 1.45% in Q4 2017and 0.76% in Q1 2018 grew strongly in Q2 2018 by 2.05%. Non-oil growth was driven by transportation which grew by 21.76% supported by growth in construction which grew by 7.66% and electricity which grew by 7.59%. Other non-oil sectors that drove growth in Q2 2018 include telecommunication which grew by 11.51%, water supply and sewage which grew by 11.98% and broadcasting which grew by 21.92%.
“The non oil sector performance was however constrained by Agriculture that grew by 1.3% compared to 3.00% in Q1 2018 and 3.01% in Q2 2017.
“Q2 2018 GDP growth was also constrained byoil GDP with crude oil and gas production contracting by -3.95% compared to 14.77% in Q1 2018 and 3.53% in Q2 2017
“Services GDP recorded its best performance in 9 quarters, growing by 2.12% in Q2 2018 compared to -0.47% in Q1 2018 and -0.85% in Q2 2017.”
Udoma says government is encouraged by the continuing growth recorded in the non-oil sector, which grew by 2.05% in the second quarter of 2018. This he noted was evidence that the implementation of the targeted policies and programmes of the Economic Recovery and Growth Plan (ERGP) is yielding positive results.
The Minister, who was reacting to the NBS Report, in a statement by his spokesman, Mr. Akpandem James, said that he was happy to see that the Nigerian economy has continued to register positive growth in the first and second quarters of the year in spite of the security and other challenges faced by the country.
He emphasized that the focus of the ERGP is on diversifying the economy away from dependence on the oil and gas sector and was encouraged that efforts are yielding fruits by the continuing growth in the non-oil sector..
The Minister noted that this 2.05% growth in the non-oil sector represents the strongest growth in the non-oil GDP since the fourth quarter of 2015.
The NBS Report indicated that the non-oil growth was driven by Transportation (road, rail water and air) which grew by 21.76%, supported by Construction 7.66% and Electricity 7.59%. These three are priority areas of the ERGP. Other non-oil sectors that drove growth in the second quarter include Telecommunications which grew by 11.51%, Water supply and Sewage 11.98% and Broadcasting by 21.92%.
The Minister regretted that there was a slight drop in real GDP growth rate for the second quarter principally as a result of the contraction in the oil sector. The Oil and Gas sector contracted by -3.95% in the second quarter of 2018 compared to a growth rate of 14.77% recorded in the first quarter of 2018 and 3.53% in the corresponding period in 2017.  However, the Minister noted that the contraction in the Crude oil and Gas sectors is attributable to some production issues which are being addressed by NNPC. For instance, average crude oil production was only 1.84 million barrels a day in Q2 2018 as opposed to an average production of 2 million barrels a day in Q1 2018. He is optimistic that once these issues are addressed we should be able to, once more, achieve positive growth in the oil and gas sector.  As he has repeatedly emphasised, the Nigerian economy needs growth from both the oil, as well as the non-oil sectors, to achieve its ERGP growth targets.
Another area of concern for Government was the slightly weaker growth in the Agriculture sector which slowed to 1.19% in the second quarter in 2018 compared to 3.0% in the first quarter of 2018.This is partly attributable to security challenges mainly in the North East and North Central zones.
These security challenge affected activities of farmers with the resultant impact on commodity output; but he indicated that the various measures being taken by government to tackle the situation is already reducing incidents of violent conflicts and other disruptions to farming activity. He therefore expects to see a rebound in growth in the Agriculture sector in subsequent quarters.
He was happy to see that Industry has continued to maintain a positive growth rate as a result of the performance of Manufacturing and Solid minerals which retained positive growth of 0.68% and 5.24% respectively in the second quarter of 2018; while the Services sector recorded its best GDP performance in nine quarters, growing by 2.12% in the second quarter of 2018 compared to a contraction of -0.47% in the first quarter of the year and of -0.85% in second quarter of 2017.
The Minister was encouraged by these GDP growth results which he said is also consistent with improvements in other indicators including inflation and capital inflows, amongst others.
The NBS Report shows that headline inflation has consistently declined every month since January 2017 through July 2018 from 18.72% to 11.14%. The consecutive disinflation year on year, which is the eighteenth in a row, has resulted in the lowest rate of inflation since June 2016, he stated.
He was also happy to note that the Nigerian economy has continued to attract significant capital inflows.“The total value of capital importation into Nigeria stood at $ 5.5 billion in the second quarter of 2018, representing a 207.62% increase compared to the second quarter of 2017”.
While capital importation declined slightly in the second quarter of 2018, the total for the first half of 2018 at $11.8billionrepresents the highest half year capital importation since 2014, indicating increasing confidence in the Nigerian economy, he pointed out.
He was optimistic that as Government intensifies its activities in the implementation of the Economic Recovery and Growth Plan the economy will sustain this growth momentum. The Minister conceded that, whilst we still have some way to go to achieve the target growth rates of the ERGP, these continuing positive results are signs that we are moving in the right direction. He re-iterated the commitment of the Buhari Administration to turn this country around to become a productive country where we ‘grow what we eat, consume what we make and use what we produce’, thereby providing jobs for our teeming population.