Several recommendations have continued to emerge the stage of discourse on the significance of drawing Nigeria out of the prevailing economic depression of the present. The worsening of situations particularly amidst recent circumstances, has made the concerns for quick intervention a subject of topical demands. On Saturday, the National Bureau of Statistics (NBS), disclosed that Nigeria’s Gross Domestic Product (GDP) contracted by 3.62 per cent (year-on-year) in real terms in the third quarter of 2020. Cumulatively, according to the report, the economy has contracted by -2.48 per cent. The report containing the data read partly: “While this represents an improvement of 2.48 per cent over the –6.10 per cent growth rate recorded in the preceding quarter (Q2 2020), it also indicated that two consecutive quarters of negative growth have been recorded in 2020. Furthermore, growth in Q3 2020 was slower by 5.90 per cent when compared to the third quarter of 2019 which recorded a real growth rate of 2.28 per cent year on year. During the quarter under review, aggregate GDP stood at N39,089,460.61 million in nominal terms.
This performance was 3.39 per cent higher when compared to the third quarter of 2019 which recorded an aggregate of N37,806,924.41 million. This rate was, however, lower relative to growth recorded in the third quarter of 2019 by –9.91 per cent points but higher than the preceding quarter by 6.19 per cent.”
In the report, the Bureau classified the Nigerian economy into the oil and non-oil sectors: For the oil sector, it was said that the average daily oil production recorded in the third quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpd lower than the average production recorded in the same quarter of 2019 and 0.14mbpd lower than production volume recorded in the second quarter of 2020.It added that real growth for the oil sector was –13.89 per cent (year-on-year) in Q3 2020, indicating a sharp contraction of –20.38 per cent relative to the rate recorded in the corresponding quarter of 2019.Furthermore, real oil growth decreased by –7.26 per cent when compared with oil sector growth recorded in Q2 2020 which was 6.63 per cent. “Quarter on quarter, however, the oil sector recorded a growth rate of 9.64 per cent in Q3 2020. The sector contributed 8.73 per cent to total real GDP in Q3 2020, down from 9.77 per cent and 8.93 per cent respectively recorded in the corresponding period of 2019 and the preceding quarter, Q2 2020.
According to report, the non-oil sector, grew by –2.51 per cent in real terms during the reference quarter, which is –4.36 per cent lower than the rate recorded in Q3 2019 but 3.54 per cent higher than in the second quarter of 2020. The report stated that the non-oil sector was driven mainly by Information and Communication (Telecommunications), with other drivers being Agriculture (Crop Production), Construction, Financial and Insurance (Financial Institutions), and Public Administration. It was further added that in real terms, the non-oil sector contributed 91.27 per cent to the nation’s GDP in the third quarter of 2020, higher than its share in the third quarter of 2019 (90.23 per cent) and the second quarter of 2020 (91.07 per cent). For the performance of major economic sectors, in real terms, the mining and quarrying sector grew by –13.22 per cent (year-on-year). Compared to real growth rates recorded in the same quarter of 2019 and the second quarter of 2020, this was lower by -19.41 per cent and –6.62 per cent respectively. The contribution of mining and quarrying to real GDP in the quarter under review stood at 8.91 per cent, lower than the rate of 9.90 per cent recorded in the corresponding quarter of 2019 and the 9.08 per cent recorded in the second quarter of 2020 respectively. However, crude petroleum and natural gas was the main contributor to the sector, accounting for 93.10 per cent of total sector output in Q3 2020.
For agriculture; crop production, livestock, forestry and fishing make up the four sub-activities of the sector. The sector grew by 13.52 per cent year-on-year in nominal terms, showing a decline of –1.36 per cent from the same quarter of 2019. Compared to growth in the preceding quarter (19.90 per cent), this represented a drop of –6.38 per cent. The report read: “Agriculture contributed 28.41 per cent to nominal GDP in the third quarter of 2020. This figure was higher than the rates recorded for the third quarter of 2019 and higher than the second quarter of 2020 which recorded 25.88 per cent and 23.92 per cent respectively.” The manufacturing sector contracted by -1.51 per cent in Q3 2020 from -8.78 per cent in Q2 2020 and 1.1 per cent in Q3 2019. In nominal terms, manufacturing sector GDP growth, in the Q3 2020, was recorded at 13.54 per cent (year-on-year), -26.15 per cent lower than the figure recorded in the corresponding period of 2019 at 39.69 per cent and 13.68 per cent points higher than the preceding quarter’s figure of -0.14 per cent. Quarter on quarter growth of the sector was recorded at 32.13 per cent. It added that the contribution of manufacturing to nominal GDP in Q3 2020 was 13.56 per cent, higher than in the corresponding period of 2019 (12.34 per cent) and the second quarter of 2020 (11.79 per cent).
As the call for pragmatic economic policies to lift the economy out of the mire of deep mess and strings of imbalances reverberates, it is significant for the Government to be strategic in its approach to macroeconomic indices. Essentially, the necessity to drive GDP growth to a balanced equilibrium is mostly important. Placing stronger priorities on other sectors of the economy that are still under performing in productivity, is key to addressing the prevailing situation. The contraction in the Country’s GDP based on poor performance of sectors with huge potentials hold no encouraging prospects, particularly compared to the performance of the previous year.
The contribution of manufacturing to nominal GDP in Q3 2020 was 13.56 per cent, with no much significant changes to what was recorded last year of the same period under review. Such inconsequential lift is unappreciable to the level of growth needed in the Country. Also, the contribution of Agriculture to nominal GDP within the period under review was 28.41 per cent. While it is higher than the records of the previous year, it is essential to state that the solution to the prevailing economic realities demands more to address ongoing strains.
It is paramount for the Government to draw inferences from the records of the prevailing performance of the economy pari persu the realities of the prevailing situations to make more viable policies to resuscitate the workings of the economy. Favourable policies to spur growth in other non oil sectors such as the Information and Communication (Telecommunications), Science and Technology, mining, Finance and Insurance, among other key sectors should be mulled by the Government with critical engagement with the concerned stakeholders of these sectors, in line with proper assessments of their virility to macroeconomic prospects and national interest.
The potentials accruable to the Country’s economy from agriculture remain huge and unquantified. The fact that the contribution of the sector to the GDP is still at the precipice, is a mirage that demands the Government take stronger and more navigating approaches to address. Coordinated policies geared towards making the sector a honeypot to the Country’s macroeconomy, should be devised and strategically channeled with purpose of interest to achieve the desired results.
The promise of the present administration to revitalise the Country’s economy to a status of virile state of productivity is still well reverberating in the ears of Nigerians. While the administration is faced with much challenges, it is essential to note that trading blames on circumstances is tantamount to being handicapped and a show of gross incompetence. The Government should devise and present before Nigerians, seasoned blueprints to address challenges across many of the under-performing sectors, with the prospects to preset the economy and change the narrative from the prevailing acute depression.