Lawrence Olaoye 
…says no cause for alarm on NBS’ GDP report
The Presidency, yesterday, said that despite the observed contraction in Nigeria’s economy during the second quarter of 2020 and the outbreak of the coronavirus pandemic, it remained on track and has outperformed earlier projections by most domestic and international analysts. Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, who disclosed this while reacting to the recent report of the National Bureau of Statistics (NBS), also said that Nigeria fared relatively better than many other countries during the period under review.
The NBS had, on Monday, published the 2nd Quarter (Q2) 2020 Gross Domestic Product (GDP) estimates, which measures economic growth. The report showed that Nigeria’s GDP declined by –6.10% (year-on-year) in real terms in the Q2’ 20, ending the three-year trend of low, but consistently improving positive real growth rates recorded since the 2016/17 recession. Consequently, the real GDP declined by –2.18% year-on-year in the first half of 2020, compared with 2.11% recorded in the first half of 2019.
The NBS also reported that Nigeria recorded an overall decline of -6.1% during the second quarter of 2020 and -2.18 per cent for the first half of the year,which was better than the projected forecast of -7.24% as estimated by the NBS. Adesina said that given the figures released by the NBS, the Nigerian economy also appears muted compared to the outcomes in several other countries, including large economies such as the U.S. (-33%), UK (-20%), France (-14%), Germany (-10%), Italy (-12.4%), Canada (-12.0%), Israel (-29%), Japan (-8%), South Africa (projection -20% to -50%), with the notable exception of only China (+3%). Adesina said that the apparent insulation of the economy from the ravaging impact of COVID-19 was due to government’s anticipation of the impending economic slowdown and introduced various initiatives as early responses to cushion the economic and social effects of the pandemic. According to him, government’s introduction of the Economic Sustainability Programme (ESP), contributed immensely to dampening the severity of the pandemic on economic growth in Nigeria. He stated that on the fiscal side, the Federal Government introduced a robust financing mechanism which was designed to raise revenue to support humanitarian assistance, just as it also floated special intervention funds to support the health sector.
In addition, Adesina said the Federal Government made adjustments to the national budget as well as emergency financing from concessional lending windows of development finance institutions which were critical in supporting governments’ capacity to meet its obligations. “On the monetary side, moratorium on loans, credit support to households and industries, regulatory forbearance and targeted lending and guarantee programmes through Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) were some of the measures implemented in response to the pandemic during the second quarter.
“It is equally worth noting that since the start of the third quarter, the phased approach to easing the restrictions being implemented centrally and across states have resulted in a gradual return of economic activity, including the possibility of international travel. “More importantly, the anticipated health impacts of the pandemic have been managed without overwhelming the health infrastructure, which would have further compromised the ability to re-open the country to travel, commerce and international trade.
“Indeed, this has provided greater confidence and ability for authorities to initiate the conduct of nationwide terminal examinations and resumption of the next academic year,” he said. Adesina said that while the third and fourth quarters were expected to reflect continued effects of the slowdown, the Fiscal and Monetary Policy initiatives being deployed by government in a phased process will be a robust response to the challenges posed by the COVID-19 pandemic. The presidential spokesman expressed optimism that as the country begins the gradual loosening up of restrictions, and levels of commercial activity increase by the day, more Nigerians would return to their various livelihoods and payrolls would expand to further stimulate the economy.
