The economy witnessed growth expansion back-toback in two consecutive quarters, according to the latest Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS).

In the latest GDP report for the second quarter of 2024, the Nigeria economy witnessed increase, as it did in the previous quarter, growing by 3.19 per cent (year-onyear) in real terms.

The growth, similar to the previous sector, was driven by the Services sector, which recorded a modest aggregate contribution of 58.76 per cent. It was the highest slice of all the contributing sectors.

Other sectors in order of contributions are: agriculture 22.61 per cent, manufacturing 8.46 per cent, trade 16.39 per cent, non-oil sector 5.70 per cent, and oil sector contribution of 5.70 per cent.

Other sectors and their contributions are, ICT 19.78 per cent (Q1, 17.89%), Finance & Insurance, 6.57 per cent (Q1, 6.81%) and real estate, 5.17 per cent (Q1, 5.20%). Interestingly, the growth elicited excitement and happiness. But it was a short-lived elation.

The growth was only visible on paper as it was not impactful and inclusive. In reality, the economy is on reverse as it is yet to improve the living standards of average Nigerians.

Coincidentally, NBS’s GDP growth report was released at a time Nigerians in the majority are wadding through difficult times occasioned by implementation of government economic reforms policies.

The tepid growth recorded by the economy doesn’t correlate with accelerated poverty level and hardships triggered by various economic reform policies of the government.

Persistent economic privation

While the economy recorded growth going by NBS’s latest GDP report, Nigerians have been battling severe economic hardship occasioned by escalation in prices of commodities. With the final removal of price cap in Premium Motor Spirit (PMS), commonly known as petrol, which saw the price of fuel oscillating between N890 to N1000 per litter.

The 50 per cent increase in petrol price hit harder on the economy, driving up prices of essential goods and services. It exacerbated financial hardships for many.

Business operators and families wail uncontrollably over the 50 per cent increase in the price of fuel. As to be expected , businesses are likely to react negatively to the new petrol price, by cutting down on cost of operations, which may include downsizing.

Majority of Nigerians are finding it difficult to afford transportation fare to their various places of work. A cheaper and affordable alternative means of transportation promised by the government is yet to be deployed fully into the system.

In the face of a new fuel price increase, the Bishop of Catholic Diocese of Sokoto, Archbishop Matthew Kukah, advised President Bola Tinubu and the leaders of the All Progressives Congress (APC) to take measures to ease the sufferings of Nigerians and also reverse the petrol price hike.

Other eminent Nigerians and pressure groups have also called on the government to intervene in the face of the hardships the new fuel price increase triggered.

Experts’ views

Finance and economic experts differ in responses to the 3.19 per cent second quarter GDP growth. Professor Uche Uwaleke, a finance expert from Nasarawa State University, attributed CBN’s aggressive hikes in monetary policy rate in February and March 2024 as taking a toll on Q2’24 output.

“This may explain the decline recorded in major contributors to GDP such as manufacturing, trade, ICT and real estate. The impact of high cost of petroleum products manifested in the huge decline in Transport GDP from 3.33 per cent to -13.53 per cent.

“Just like in Q1 2024, when growth was driven by the oil sector, growth in Q2 2024 was also driven by the oil sector at 10.15 per cent.Oil sector growth was aided largely by the increase in crude oil price during the quarter as average crude oil production fell (from 1.57mbpd in the previous quarter to 1.41mbpd),” he observed.

“In my view, this identified growth pattern, weighted in favour of the services sector, is not healthy for a developing economy such as ours. Little wonder, economic growth does not appear inclusive reflecting in rising unemployment and poverty levels. It is time we reset this faulty economic structure, lever

In truth, the economy recorded growth in the second quarter of 2024 driven largely by the Services sector. However, the growth isn’t an inclusive one

aging technology, in favour of the productive sectors, industry and agriculture,” Uwaleke said. An economist and Managing Director, Financial Derivative Company, Bismarck Rewane, had stated that the $1 trillion economy target of the current administration would not be possible in the next five to six years.

Speaking recently during an interview session on Arise TV, Bismarck said the current GDP growth rate of 3.19 per cent was too slow to make any difference, as about 75 per cent of the sectors of the economy contracted during the quarter under review.

Furthermore, he noted that the country had fallen behind in its goal of being among the top 20 economies globally and that it’s not possible to achieve the $1 trillion economy target.

According to him, the current GDP growth rate of 3.19 per cent is too slow to make any difference as about 75 per cent of the sectors of the economy contracted during the quarter under review.

Furthermore, he noted that the country had fallen behind in its goal of being among the top 20 economies globally and that it’s not possible to achieve the $1 trillion economy target.

“What are the broad mark economic goals of this economy? We want to be among the top 20 economies in the world, and then we were26. Today, we are 32 so we have worked our way down the ladder of success.

“Secondly, we now said that we want the economy to be a $1 trillion economy but now we are $384 billion that means we have to have like 200 per cent growth in the next four to five years that is not going to happen.

“We also said we want to insulate our economy from external shocks but as we integrate our economy into the global economy, we are facing those shocks,” he concluded.

Adding her voice to the GDP growth, and the absence of growth inclusivity, Director General of the World Trade Organisation (WTO), Professor Ngozi Okonjo-Iweala, observed that Nigeria’s Gross Domestic Product (GDP) growth rate on average had been steadily declining since 2014, signalling a downturn in the economic wellbeing of the average Nigerian.

She spoke at the annual general conference of the Nigerian Bar Association (NBA). According to the former Minister of Finance, the country’s economic fortunes experienced a reversal following the decade between 2000 and 2014, during which the average GDP growth rate was approximately 3.8 per cent.

She noted that the consistent GDP growth outpaced the nation’s population growth, which was only around 2.6 per cent annually. However, she pointed out that since 2014, the situation has reversed, with GDP showing a negative growth rate of 0.9 per cent, as the government has been unable to sustain the positive growth achieved by previous administrations.

Last line

In truth, the economy recorded growth in the second quarter of 2024 driven largely by the Services sector. However, the growth isn’t an inclusive one.

The number of Nigerians in the poverty net negates percentage growth recorded by the economy. Until economy policies begin to yield fruits as promised by the government, the current growth is fluke.