By UCHE CHRIS
The Gross Domestic Product, GDP, growth rate figure released Tuesday for the fourth quarter of 2018, by the National Bureau of Statistics, NBS, has been described as artificial and unsustainable as it does not reflect the true nature of economic performance. The NBS released a figure of 2.34 percent for 2018, an increase of 1.4 percent over that of last year year on year. The first quarter of 2018 recorded 1.9 percent but dropped to 1.5 percent in the second quarter, then rose marginally to 1.8 in the third quarter. The cumulative growth rate in2018 is 1.85 percent.
In 2017, the economy also grew by 1.9 percent which was fairly impressive considering that the economy was just emerging from a-15 recession. The economy performed below expectations and projections in 2018.The Central Bank of Nigeria and the World Bank projected 2.5 growth but later revised it downward to 2 percent while the IMF projected 2.7 percent but revised it to 2.3 percent for the year. The government in the budget projected a growth of 3.5 percent.
“Given these conditions, the economy underperformed in 2018 as it only equaled the 2017 performance which was coming after recession; last year was the first year after the recession and there was no remarkable improvement”, Mr. Teslim Shitta-Bey of Proshare Consults .
“This figure by the NBS showed the economy actually declined, as the figured is artificial and unsustainable – for two reasons: First, the end of year period usually witnesses increased spending and capital importation from the diaspora, and does not provide accurate picture of economic performance. Second, this is election season and the massive election spending has contributed to the improved growth figure. It does not reflect the level of increased economic activity in the economy“.
According to him, the growth figure is driven by services and agricultural sectors while the real sector actually declined. The two sectors add little value to the economy in term of real employment”, he said.
Going forward, he believes the economy will do well in the first quarter of 2019 as a result of election spending, but will drag afterwards.
“The economy will not do better this year because the budget for the year contracted from N9.2 trillion to N8.4 trillion; so in both real and nominal terms, the economy will decline because the budget spending is less this year and growth comes from spending, he said, adding that with less spending economic activities are not likely to rise significantly in 2019. So the 2.3 percent growth is an isolated event.