Flowing from the five per cent growth in the second quarter of 2021, the National Bureau of Statistics (NBS) is optimistic the Gross Domestic Product (GDP) will sustain the growth till year-end.
It however hinged the growth can only be sustained with an improvement in agriculture and other sectors in the current third quarter (Q3) which remains one month.
The NBS last week announced a five per cent growth of the GDP in the last quarter, the strongest since 2014.
The Q2 2021 growth rate was higher than the -6.10 per cent growth rate recorded in Q2 2020 and the 0.51 per cent recorded in Q1 2021 year on year which indicated the return of business and economic activity near levels before the nationwide implementation of COVID-19 related restrictions.
The growth was driven by the non-oil sector which grew 6.7 perc as against 0.8 per cent in Q1 and was boosted by trade, information and communication, transportation, electricity, agriculture and manufacturing.
Unlike the non-oil sector, the oil sector shrank 12.65 per cent owing to a 2.2 per cent fall in the previous period. In the second quarter of the year, average daily crude oil production stood at 1.61 million barrels per day, down from 1Mbpsmbps in Q4 and 1Mbpsmbps a year every quarter basis, the GDP decreased 0.8 per cent.
Speaking on the sideline of a press conference by Minister of Finance, Zainab Ahmed, and Information Minister, Lai Mohammed, Simon Harry, the new Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics (NBS) said deliberate policies to sustain the recent growth and even improve on it must be ensured.
“As we are all aware, without sustaining the grossly you don’t expect any impact. That is why from the producer side as much as possible, what we do is to encourage govt that deliberate policies should be put in place for us to be able to sustain the growth and even improve on it. From what is happening now and the improvement in the funding of government business there is hope that Q3 of 2021 will see a lot of improvement.
“This year has witnessed a timely release of budgetary provisions to all MDAs and we expect that to have a multiplier effect on other sectors of the economy. So all I will encourage policymakers is for us to look at those Sectors that are not performing in Q2. For instance, agriculture performance was not encouraging and I think that with improvement in funding if agriculture and other subsectors under it are improved Q3 will be a lot better. Overall I think by the end of the year, we should be able to grow above 5 per cent ” he said.
Meanwhile, Clem Agba, the Minister of State for Budget and National Planning, at the conference also disclosed that Federal Government plans to ensure that at the end of the year, the 2021 budget is funded 100%.
Agba said that currently, the 2021 budget saw 25 per cent funding at the first quarter, adding that 50 per cent was approved recently to bring it to 75 per cent.
“Apart from that the 2020 budget was funded 100 per cent the 2021 budget, 25 per cent funding Q1, 50 per cent were approved recently to bring it to 75 per case plan is to ensure that at the end of the year, the 2021 budget is funded 100 per cent,” he said.
Agba attributed the economic growth to the fully funded economic sustainability plan of N500 billion.
“We are borrowing but with a clear set objective of the Sustainability of the borrowing. The borrowing level of Nigeria today is 23 per cent of GDP. I have said severally that the problem we have in Nigeria is that of revenue.
“We are borrowing sensibly and we are borrowing to invest in infrastructures like power, water, roads and railway. This Investment will enhance business and Productivity in the country, businesses will grow, pay taxes and employ people. if we don’t do these Investments now we will regress from where we are. We are borrowing responsibly, the way we are borrowing is to ensure we invest in infrastructure that will return Revenue to the government.
“In the economic sustainability plan, we have a budget of 500billion specific to the plan, this is aside from the 1.8trillion that was to come from the financial institutions under special borrowing terms. We have fully funded the economic sustainability plan, again that is why we see some of this growth” he added.
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