Expert: GDP growth not translating to improved quality of life
An Economist, Dr Aminu Usman, said the growth in the country’s Gross Domestic Product (GDP) is not translating to improved quality of life of its citizens.
Usman, who is the Head of Economics Department, Kaduna State University, expressed the concern in an interview with the News Agency of Nigeria (NAN) in Abuja yesterday.
He said it was worrisome that the little improvement recorded with regards to the GDP growth rate had not translated to improvement in the people’s quality of life.
The don, however, urged the Federal Government to pay more attention to the sectors that contribute more to the nation’s GDP to enhance sustainable growth.
“This is because the sectors that contribute more to the GDP are still bedevilled by many weaknesses.
“The economy’s future is hanging precariously on the fortunes in the oil sector as it has always been without the much talked about change promised,’’ he said.
According to the National Bureau of Statistics (NBS), the first quarter of 2018 started on a bright note as the GDP grew by 1.95 per cent (year-on-year) in real terms.
The GDP report shows a stronger growth when compared to the first quarter of 2017, which recorded a growth of -0.91 per cent indicating an increase of 2.87 percentage points
When compared to the preceding quarter, there was a decline of -0.16 percentage points from 2.11 per cent. Quarter on quarter, real GDP growth was -13.40 per cent.
This will be the fourth quarterly consecutive positive expansion since Africa’s largest economy exited recession in Q1, 2017. Usman, however, said that the GDP figures had shown downward slide back to recession.
“It was about 2.17 per cent during the 3rd quarter of 2017, 2.1 per cent in the last quarter of 2017 and now 1.95 per cent for the first quarter.
“This is a very disturbing trend given the fact that we recently celebrated our exit out of economic recession. (NAN) A don, Dr Charles Nwaekeaku, has said the progressive decline in inflation rate is heart-warming, but advised the Federal Government to plan more rather than jubilate as the development is temporary. Nwaekeaku, an Associate Professor at Nassarawa State University, Keffi, gave the advice in an interview with the News Agency of Nigeria (NAN) yesterday in Abuja.
His advice was sequel to June 13, 2018, publication of the Consumer Price Index which showed that inflation rate decreased from 13.34 per cent in April to 11.61 per cent in May (year-on-year).
The NBS statistics showed 16 consecutive reductions in inflation rate since January 2017. Nwaekeaku, while applauding the rise in the nation’s foreign reserve, however, expressed concern over the corresponding jump in foreign debt.
“The increase in foreign reserve also is heart-warming but at the same time, our foreign debt has gone up. “Nigeria’s debt is over 13 billion dollars and the debt has been skyrocketing.
“One factor that is responsible for our increased foreign reserve is the increase in oil price in the international market.
“It is not that the country’s productivity has improved; it is not that we have done more exports from other sectors; the major factor is that the oil production has been steady.
“Militants have not been disturbing; so, Nigeria has been producing over two million barrels per day; thus earning more from oil.
“The increase in foreign reserve has brought multiple confidence on our economy and the continued intervention of the CBN on foreign exchange transaction has also helped to stabilise the naira.”
He explained that the intervention by the CBN would subsist as long as oil prices remained high but that if the oil production level or its price crashed, “everything will tumble”.
“It will tell on the foreign exchange; it will tell on the foreign reserve; it will have circulatory effect and so there will be a relative decline in the inflation rate. “Moreover, this is election year; any moment from now, politicians will start releasing money; all the money they stashed away in private houses and other dormant places will come out. (NAN)