The Nation’s Gross Domestic Product, GDP, seems to have finally crashed, as it fell to an all-time low of -2.24 percent in the third quarter of 2016. This is according to a latest report from the National Bureau of Statistics, NBS, released on Monday, November 21, and made available to Post-Nigeria.
According to the NBS, the -2.24 percent recorded in the third quarter, was lower than the 0.18 percentage points from the negative growth rate recorded in the second quarter.
The negative growth rate, has confirmed the fears being expressed by Economic Experts, that the government is not doing enough to address the challenges facing the country.
The aggregate GDP in nominal terms according to the bureau, stood at N26.5 trillion, with most of the sectors in the economy recording a decline.
Part of the report reads: “In the third quarter of 2016, the nation’s Gross Domestic Product contracted by -2.24 percent (year-on-year) in real terms.
“This was lower by 0.18 percent, from growth recorded in the preceding quarter, and lower by 5.08 percent, from growth recorded in the corresponding quarter of 2015,” NBS said.
During the period under review, oil production on the average stood at 1.63 million barrels per day, lower than the second quarter’s production figure.
Due to the huge decline, the report stated that real growth of the oil sector, dropped by -22.01 percent year-on-year, in the third quarter, as against -17.48 percent in the second quarter.
For the manufacturing sector, GDP growth in third quarter was recorded at -2.93 percent year-on-year, lower by 1.02 percentage points than what was recorded in the second quarter.
The bureau blamed the decline on the continued drop in exchange rate, which had made inputs more expensive.
It said, “Nominal GDP growth of manufacturing in the third quarter of 2016, was recorded at -2.93 percent year-on-year.
“This is partly due to the continued fall in the exchange rate, which makes imported inputs more expensive, thereby increasing business costs.
“This is greatly as a result of continued fall in the naira to dollar rate, which translates to much higher cost of business operations.”
Reacting to the development, the President, Manufacturers Association of Nigeria, Frank Jacobs, lamented that the manufacturing sector had been badly hit as a result of the economic crisis, adding that, output had seriously declined, owing to the foreign exchange crisis.
He said, “This (GDP decline) is expected; we are experiencing scarcity of foreign exchange, and we are badly hit.
“I expected the decline of the GDP growth rate to be higher than the -2.24 percent, because most of our members have been complaining badly, that they can’t access forex to buy raw materials.
“Some of them are closing down, and reducing their capacity utilisation.
“Things are really bad for the manufacturing sector”.
Concluding, he called on the National Assembly to speedily approve the loan request of President Muhammadu Buhari, to enable the government to spend the economy out of recession.
“My advice to the government, particularly the National Assembly, is to approve the President’s request for the loan of $29.96 billion, because what we really need, is to bring in money to spend our country out of this recession.
“We can’t do that by any other way, except borrowing, provided that the money they borrow is applied judiciously to the productive sectors, and infrastructure development,” Jacob said.