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Redemption from recession -Nation Editorial

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President Muhammadu Buhari’s cautiously optimistic reaction to the news that Nigeria had emerged from the recession which hit it in late 2015 demonstrates a welcome recognition of the fact that a lot more work has to be done to put the nation’s economy on a truly sustainable footing.

The National Bureau of Statistics (NBS) declared that the economy grew by 0.55 per cent in the second quarter of 2017, after five successive quarters of contraction.

The development was attributed to improvements in several sectors, most notably the oil sector, which recorded 1.64 per cent of growth in the second quarter of 2017, compared to -15.60 per cent in the first quarter of the year.

 

The non-oil sector grew by 0.45 per cent in the second quarter of 2017, building upon 0.72 per cent growth recorded during the first quarter. Agriculture grew by 3.01 per cent during the second quarter of 2017, as did manufacturing, which grew by 0.64 per cent during the second quarter of the year, improving on the 1.36 per cent rise of the first quarter. Growth was also seen in solid minerals, and electricity and gas.

Heart-warming as it is, Nigeria’s exit from recession does not automatically imply entry into prosperity for the majority of its citizens. Many of the basic challenges which caused economic contraction in the first place are still largely unsolved, especially the infrastructure deficit, inflation, interest rates and high unemployment.

If the country is to build upon the encouraging economic signs on the horizon, it has no option other than to tackle its infrastructural challenges decisively. Without a viable transport system, reliable power and water, and well-planned towns and cities at the minimum, it will be difficult to transform positive statistics into clearly-perceived economic growth.

Resolving the vexed issue of power is particularly important. Nigeria reached 4,158 megawatts in April 2017, an achievement which is extremely inadequate for a nation of about 170 million, and is still beset by challenges of transmission, distribution and costing. Inadequate power supply is a drawback which has negative effects on industry, small-scale businesses and the efficient provision of services.

Closely allied to this is the vital need to make the country’s agricultural sector more modern and efficient. As the largest contributor to the country’s gross domestic product, and the biggest employer of labour, it is crucial that the sector is better able to deliver staple foods to markets, provide raw material for industry, wean the citizenry off imported agricultural products, and become a viable career option.

Nigeria’s stubbornly high interest and inflation rates also require attention if economic growth is to become truly sustainable. Combined with persistently high foreign exchange rates, they conspire to make the cost of doing business in the country much higher than it should be.

 

Government must move away from the mechanical celebration of data which is all too often disconnected from palpable changes in the lives of ordinary citizens. As President Buhari implied, the most positive economic numbers in the world are meaningless if they do not correspond with actual improvements in the well-being of the majority.

The country’s economic managers must continue to ensure that all components of the Economic Growth and Recovery Plan (EGRP) are implemented in accordance with laid-down timelines. The various interventions and initiatives enumerated in the plan should be closely monitored and fine-tuned as the need arises.

It is particularly important that public office-holders re-commit themselves to the hard work and self-sacrifice that are essential to a successful turnaround of the economy; declining to convene Federal Executive Council meetings allegedly because of public holidays runs counter to that spirit.

Nation

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