EXPERTS’ VIEWPOINTS

“For Nigeria to bridge the recessionary gap and attain a long-term GDP growth trajectory that is both sustainable and job-creating, the timing and pace of economic reform are crucial and cannot be politicised. The subsidies in the economy have to be tackled. The most notable are the ones on forex, fertilisers, petrol, electricity and the money market.

“While the move to market-determined rates has been somewhat reluctant and has been met with resistance, it is necessary for the creation of economic incentives and investor confidence. Only this has the capacity to propel Nigeria to an accelerated GDP growth path.”

The Fund had put the country’s growth estimate at 2.5 per cent, which is a far cry from the six per cent global average projection. But Director-General of the Institute of Fiscal Studies, Godwin Ighedosa, dismissed the growth, saying it is coming from the low figure recorded last year and that it adds no value to the wellbeing of the people.

He said: “We are not seeing the positive figures that do not affect the lives of the people. Food prices are going up, which is the major concern of the average family. The prices are going up because there is a shortage of supply.”

He explained that GDP will impact positively on the people if there are improvements in manufacturing, agricultural production adding: “Unfortunately these two sectors, which would have also engaged the people in terms of employment, are currently shrinking following the severe insecurity across Nigeria. Manufacturing and agriculture activities have slowed down; this is why we are experiencing high prices today. This is what driving inflation is. So, for that reason, we have massive unemployment in our hands.”

Ighedosa said there is the tendency for the economy to start heating up; hence, the Central Bank of Nigeria (CBN) must monitor the response of key prices, including interest rates.However, Vice Chairman of Highcap Securities Limited, David Adonri, said the GDP growth was a quantum leap when compared to the contraction of -6.1 per cent in Q2 2020 and 0.51 per cent in Q1 2021.

He described the growth as flattering, noting that the performance is not reflective of the supply side of the economy, considering the current high inflation rate.

“The figure may have been magnified by the base effect of -6.1 per cent last year. For us to know how far the economy has moved, the absolute figure in naira for Q2, 2021 needs to be compared to the figure at the beginning of 2021,” he said.

Adonri, however, said real growth was possible considering that the economy has continued to recover from the COVID-19 disruption and border reopening.

The Director, Centre for Economic, Policy and Research of the University of Lagos, Professor Ndubuisi Nwokeoma, described the growth as phenomenal given the increasing level of insecurity, kidnapping, unemployment and other macroeconomic challenges.

He bemoaned the prevailing insecurity in the country, urging the government to evolve new strategies to address the trend. He said insecurity was a disincentive to investment and productivity, saying the economy could only record meaningful growth if the challenge is addressed.

In his analysis, an economist and private sector advocate, Dr. Muda Yusuf, said many sectors that posted “impressive growth numbers do not contribute significantly to the GDP,” a situation he said called for the need to reset the economy.

“The GDP numbers suggest the need to reset, rejig and reform key sectors of the economy. We need to fix issues around the regulatory environment, tax environment, the multitude of levies imposed on businesses by all levels of government, foreign exchange policies, port environment and other structural bottlenecks to productivity in the economy.

“There are still worries about the macroeconomic challenges reflecting spiraling inflation, weakening of the currency, forex market illiquidity, spiking debt profile among others. Insecurity remains a major source of risk inhibiting investments, whether domestic or foreign. It is good to celebrate the GDP growth numbers but this should be done cautiously,” he advised.

Yusuf said the impact of the GDP growth on citizens’ welfare and the productivity in the investment environment is crucial for assessing the performance of the economy.

“These are the metrics that matter most, ultimately. The GDP figures are not ends in themselves; they are means to an end,” he noted.

Responding to the growth in the ICT sector, which NBS put at 5.5 per cent, the Minister of Communications and Digital Economy, Dr. Isa Pantami, attributed the rising contribution of the ICT to the commitment of the current administration to the development of the digital economy.

In a statement signed by the Minister’s Technical Assistant (Information Technology), Dr. Femi Adeluyi, Pantami said the 16 national policies developed by the ministry, 1,667 projects and programmes, the large-scale digital skills and general capacity-building efforts, stakeholder engagement and creation of an enabling environment have all played an important role in this achievement. Speaking to the report, the Chairman, Mobile Software Solution, Chris Uwaje, said the sector could do more with better policies.

EXPERTS’ VIEWPOINTS