After almost a year of negative growth that resulted in the collapse of businesses, the Nigerian economy is looking up, signaling an end of the recession, the World Economics, said yesterday.
However, the body cautioned that “conditions remain difficult for businesses,”
World Economics is a London-based organization dedicated to producing financial analysis, insight and data relating to questions of key importance to the global economy.
It said: “April Sales Managers’ Index (SMI) data suggests that the Nigerian economy is continuing to grow out of the recession which saw 10 months of consecutive contraction in 2016.”
It indicated in a release published on its website, that the Market Growth Index grew to 58.5 in April as the monthly Sales Growth Index ticked up to 56.7, its highest value since 2015, giving an indication of rapid growth. It said price inflation for April, which is tracked by the Prices Charged Index, remained high at 58.7 – indicative of high levels of inflation. However, this has started to moderate for the past few months.
The Special Adviser on Media Matters to the Minister of Budget and National Planning, James Akpandem, said statistical analyses and economic experts’ assessments clearly indicated that the economy was coming out of recession.
“The latest report from the National Bureau of Statistics which details significant aspects of economic activities in the first quarter of this year clearly showed that inflationary trends are coming down, while the major fundamentals are increasingly showing positive outlook.
“That showed that the economy is coming out of recession,” Akpandem said.
“The statistics are very clear on that and if you also listen to our economic experts, that is what they are saying; some of them had been predicting the trend before now,” he said.
“For instance, at least one of the banks and some notable economists predicted that inflation would be going down and the current indicators showed that the economy is coming out of recession,” Akpandem said.
Nigeria’s economy receded at the end of Q2 in 2016 after falling oil prices ate deep into the country’s earnings and caused the naira to weaken thereby causing inflation to spiral upward. Spates of attacks on oil installations in the Niger Delta by militants, who were protesting for better deals from the government, almost crippled oil production.
But the government’s recent engagements in the oil-rich region, spearheaded by Vice President Yemi Osinbajo, have seen attacks on oil facilities petered out, at least, for now.
Last Thursday, National Bureau of Statistics (NBS) said inflation rate dropped by 0.52 per cent in March to close at 17.26 per cent, the second decline recorded in two months.
“This is the second consecutive month of a decline in the headline CPI on a year-on-year basis,” NBS said in its report.
“It represents the effects of stabilizing prices in already high food and non-food prices as well as favorable base effects over 2016 prices.”
But World Economics noted that there are still issues the economy’s handlers need to fix before it can be out of the woods.
“Panelists have explained that although conditions remain difficult for businesses, they are adapting to the challenges and the recent changes to the naira’s FX rate are aiding sales transactions.”
Overall, conditions in Nigeria have improved further over the past month and managers are expressing renewed optimism that the economy will continue to grow and regain strength after the recession.