NBS to confirm Nigeria’s exit from recession Tuesday

THE much awaited confirmation from National Bureau of Statistics (NBS) on whether or not Nigeria has finally exited its longest recession since 1987 will now be released on Tuesday.

Earlier due for release last Friday, NBS issued a statement instead, apologizing that it could no longer release the 2017 second quarter GDP report due to the Muslim holidays but that it “will be released on Tuesday, September 5, 2017 and not Monday, September 4.”

Nigeria had recorded recession in 1968, 1991 and 1995. The country recorded a full year decline in 1991 with 0.6 and 0.3 percent respectively.

Africa’s largest economy slid into recession in the second quarter of 2016 due mainly weaker global oil crisis, delay in devaluation of naira, which prevented businesses from getting foreign currencies and inability of the current administration to take off soon enough.

However, there have been wide predictions that the country would exit recession in 2017 with some saying it had already done so by the first quarter and others saying it will be come before year end.

Federal Ministry of Finance, Central Bank of Nigeria (CBN), International Monetary Fund (IMF) and World Bank have variously insisted that the country would exit recession before end of 2017.

According to Minister of Finance, Mrs Kemi Adeosun, available statistics as at June showed that Nigeria was already getting out of recession.

Adeosun who spoke while featuring on a television breakfast show said, “I think we are getting out of recession, all the statistics seems to suggest that but more importantly, we are getting on the part of the growth that will be sustainable so we can see a future for Nigeria.

“So, I think it is getting better,” the minister said.

Also in May, the World Bank also predicted that the country would exit recession within the year though it warned that the economy was fragile adducing the high degree of fragility and risks from future shocks to the oil price or further unrest in the Niger Delta region as reason.

The economic update also revealed that an analysis of the constraints to doing business and the impact of current trade policies highlights the need to improve access to finance, improve the reliability of power supply, and adjust trade policies to promote productivity growth.

Also rising from its Monetary Policy Committee meeting on July 26, CBN had already looked beyond the recession and was warning against future pitfalls.

Reading the communique of the committee, CBN Governor, Mr Godwin Emefiele advocated and activation of bold policies to support “current fragile growth.”

“Available forecasts of key macroeconomic indicators point to a fragile economic recovery in the second quarter of the year.

“The Committee cautioned that this recovery could relapse in a more protracted recession if strong and bold monetary and fiscal policies are not activated immediately to sustain it.

“Thus, the expected fiscal stimulus and non-oil federal receipts, as well as improvements in economy-wide non-oil exports, especially agriculture, manufacturing, services and light industries, all expected to drive the growth impetus for the rest of the year must be pursued relentlessly.”

Data from NBS showed that while the economy contracted by -1.30 percent in the fourth quarter of 2016, the contraction had declined to -0.52 percent by the end of March 2017.

Also, the Purchasing Managers’ Index (PMI) of CBN has also showed consistent improvement in the last many months, indicating that the economy was on the upward movement above 50 points.

“A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally declining”, the bank stated on its PMI report.

For instance, in July 2016 manufacturing sector declined to 42.1 index points in August 2016, compared to 44.1 in the preceding month.

Production level also declined to 40.5 index points; new orders index declined for the eighth consecutive month to 37.5 points; employment level was on a faster decline at 40.4 points; raw materials inventories index declined for the eighth consecutive month to 40.0 index points;
In contrast, CBN reported that manufacturing PMI rose to 54.5 points in July 2017, indicating that economic activities expanded faster.

Overall, 27 of the 34 subsectors surveyed during the month recorded growth.

“The production level index for the manufacturing sector grew for the fifth consecutive month to 59.5 points.

“Manufacturing employment level index stood at 51.8points, indicating growth in employment level for the third consecutive month.

“Composite PMI for the non-manufacturing sector grew to 54.5 points in July 2017,” CBN stated.