The latest figures released by the Nigeria Bureau of Statistics (NBS) indicate that Nigeria has exited recession as the Gross Domestic Product (GDP) grew by 0.11% in the fourth quarter of 2020. It was the first positive quarterly growth for the entire year as the three preceding quarters all recorded negative growth figures.
The NBS report attributed this salutary development to the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the fourth quarter.
The recession came as a direct consequence of the worldwide Covid-19 pandemic which necessitated drastic measures by governments around the world to curb its spread. Economic and commercial activities were the worst hit as governments were compelled to enforce lockdowns and other measures.
Although news of the recovery of the economy is cheering, the downside is that inflation is still rising according to the report. Also to the average Nigerian, having to cope with the excruciating effects of the prevailing economic situation in the country, this development may even be a meaningless statistic to him.
But it offers a glimmer of hope of brighter prospects in the Nigerian economy which will eventually rub positively on Nigerians. This is as oil prices are now on the rebound after a long period in the doldrums which drastically affected the revenue and budget projections of the government.
The Presidency, in its reaction to the development, stated that it was the clearest indication yet that the Economic Sustainability Plan (ESP) approved by the federal government was working. Laolu Akande, the spokesman of the Vice President, Professor Yemi Osinbajo, who is tasked with implementing the plan, said when the ESP was launched last year, it was to prevent Nigeria from entering a deep recession. He said with the exit of recession, the federal government was determined to pursue the steady recovery and growth of the economy with even more robust intervention programmes like the plan to install five million solar installations across the country and social mass housing resulting in hundreds of thousands of affordable houses for ordinary Nigerians. Both projects, he said, will yield hundreds of thousands of jobs, thereby giving the economy a massive boost.
Given that the earlier projection was that the economy will not exit recession until the first quarter of 2021, this indeed is a remarkable development. It is also encouraging to note that the government is already thinking pro-actively in this direction with the measures being undertaken under the ESP.
We call attention to the aspect of the NBS report which stated that the agriculture and telecommunication sectors recorded significant growth within the period under review which gives hope that the economy is expanding beyond the oil sector which is presently the mainstay. Indeed as the report indicated, these two sectors contributed in no small measure towards Nigeria exiting recession.
It is necessary, therefore, that having shown such promise and potential, the two sectors should be robustly supported by government to grow even further. They both have the capacity not just to employ as many Nigerians as possible, but to actually help launch the country into the path of sustainable economic development.
One notable area of the economy to which the NBS report did not give due recognition, is what is called the informal sector. Economic planners call it so because its operations are difficult to track and fit into measurable indices. But in many ways this sector has been the bedrock of the Nigerian economy, providing livelihoods for millions of Nigerians across the country. Indeed it is conceivable that the operations of this sector would have contributed largely to the growth of the economy in the last quarter of 2020, thereby helping to attain the result thus recorded.
As the government institutes measures to sustain the gradual recovery of the economy, going forward it should consider integrating the informal sector and formal sectors of the economy as a long term imperative. This will among others enable proper economic planning and regulation to expand the economy befittingly and in line with modern realities.