‘Nigeria’s post-recession growth pattern is still skewed’
Nigeria’s post-recession growth pattern is said to be skewed towards a few sectors, showing the limited capacity of the economy to create jobs and reduce poverty, latest report by the Nigerian Economic Summit Group (NESG) has revealed.
In its Macroeconomic Outlook for 2019 released Monday, in Lagos, the NESG noted that few sectors account for a larger share of the gross domestic product (GDP) growth, demonstrating the limited capacity of the economy to absorb individuals in the ever-growing labour market.
Recent GDP data show that Nigeria’s economic growth is tilted towards a similar pattern as in the pre-recession era, where growth was driven by a few sectors.For instance, in the first three quarters of 2018, 13 out of the 19 major sectors contributed positively to GDP growth. Out of these 13, only six sectors accounted for 90 per cent of the GDP growth during the period.
Meanwhile, comparable data from Indonesia showed that the top six sectors contributed 72 per cent to the country’s GDP growth in H1 2018, leaving room for the remaining 11 sectors. The GDP data for Nigeria show that there are other sub-sectors such as metal, iron and steel, and electrical and electronics that contribute almost nothing to GDP growth, yet these sectors have the capacity to create jobs, and meet the needs of consumers both in the local and export markets.
Speaking at the launch, Chairman, NESG, Asue Ighodalo, said the economy would grow by additional four per cent if increased attention were given to power. Government policies and intervention must aim at achieving “quality” economic growth that delivers a significant reduction in poverty, and unemployment.
Ighodalo said: “We need to also concentrate on education at every level, vocational, technical. The world is growing rapidly and becoming extremely digital, but we are not educating the people for the direction the world is growing; we are not educating our people for the level of development that we require.
“So we need to focus on education and medium and small scale industries, while encouraging the private sector. We need to get plenty of the new capital coming into our economy; Agro-economy for instance, those areas that touch the lives of people. We can’t continue just having one per cent of our people very wealthy and the rest of our people very poor,” he said.
Ighodalo added: “The way Nigeria needs to progress is that we need to determine the growth rate that we require to go into an emerged economy framework; Government and policymakers, and economists need to start thinking beyond a growth rate of three percent.”
Presenting the outlook, Head of Research, Dr Olusegun Omisakin, said to deliver broad-based economic growth that addresses the priorities of the job-creation, and poverty-reduction, there is a need to have a fundamental shift in the thinking of the Nigerian government’s role in the business.
Omisakin urged government at different levels and its agencies to truly act as ‘enablers’ in the business environment rather than creating hurdles for businesses through fierce regulations, and numerous charges.
He noted that the central role of the Nigerian Government in defining sectoral goals and plans; guiding the policy process; identifying key constraints within sectors; addressing these constraints, while ensuring policy coordination across the board is crucial in opening up sectors to investments, enhancing value addition, and creating jobs in the process.
Omisakin said effective government regulation sets the tone for growth of small businesses, innovation of industries, and global competitiveness of a nation, as countries with better regulations are found to be more competitive than those with a harsh regulatory environment.
Chairman, NESG’s Board Committee on Research, Dr. Doyin Salami, said government has a more pressing need to rearticulate the vision of Nigeria, in order to attract foreign investors. Salami said Nigeria’s economy would succeed to the extent that the general election succeeds. “We need to ensure successful elections, it is an imperative or else ability to drive the economy will be reduced.”