The Presidency on Wednesday admitted that the level of inflation and unemployment in the country remains “stubbornly” high.
The Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, admitted this in a statement on the latest National Bureau of Statistics’ report.
Dipeolu’s statement was made available to State House correspondents by the Senior Special Assistant to the Vice President on Media and Publicity, Mr. Laolu Akande.
Dipeolu stated: “The inflation rate remains high, but the good news is that the month-on-month rate of increase has fallen continuously over the past three months. Unemployment remains stubbornly high which is usually the case during growth slowdowns and for reasons of a structural nature”.
He, however, noted that barring unforeseen shocks, the areas given priority by the Federal Government “are beginning to respond with understandable time lags to policy initiatives”.
The Economic Adviser pointed out that as the emphasis on capital expenditure begins to yield results and the investment/GDP numbers increase, the growth rate of the economy is likely to improve further.
He said as these trends continued, “the outlook for the rest of the year is that the Nigerian economy will beat the International Monetary Fund’s prediction of 1.8% for the full year 2016.
“The IMF had forecast a growth of -1.8% for 2016. However, the economy is performing better than the IMF estimates so far. For the half year, it stands at -1.23% compared to an average of -1.80% expected on average by the IMF.
“What is more, it is likely the second half will be better than the first half of 2016. This is because many of the challenges faced in the first half either no longer exist or have eased”.
According to Dipeolu, “The just recently released data from the National Bureau of Statistics showed that Gross Domestic Product declined by -2.06% in the second quarter of 2016 on a year-on-year basis”.
He stated that a close look at the data revealed the decline in GDP was as a result of the sharp contraction in the oil sector due to huge losses of crude oil production following acts of vandalism and sabotage.
He, however, noted that the rest of the second quarter data is beginning to tell a different story – a story of growth in the agricultural and solid minerals sectors, which he stressed are the areas in which the Federal Government has placed particular priority.
“Agriculture grew by 4.53% in the second quarter of 2016 as compared with 3.09% in the first quarter”, he pointed out, adding “The metal ores sector showed similar performance with coal mining, quarrying and other minerals also showing positive growth of over 2.5%”.
Worthy of note, the Economic Adviser said, is that share of investments in GDP increased to its highest levels since 2010, growing to about 17% of Gross Domestic Product.
Similarly, the manufacturing sector, which he acknowledged is not yet truly out of the woods, is beginning to show signs of recovery; while the service sector similarly bears watching.
“Nevertheless, the data already shows a reduction in imports and an increase in local produced goods and services and this process will be maintained although it will start off slowly in these initial stages before picking up later”.
In his own remarks, Mr. Akande, said though the just released GDP figures by the NBS for the second quarter confirmed a temporary decline, it also indicated a hopeful expectation in the economic trajectory.
“Besides the growth recorded in the agriculture and solid mineral sectors, the Nigerian economy, in response to the policies of the Buhari Presidency, is also doing better than what the IMF had estimated with clear indications that the second half of the year would be even much better”, he stated.
Akande said the Presidency would continue to work diligently on the economy and engage all stakeholders to actively pursue beneficial policy initiatives and deliver dividends to Nigerians.