Financial experts and economists have told President Bola Ahmed Tinubu-led FG that Nigeria’s 3.19 percent Gross Domestic Product growth rise in the second quarter of 2024 has failed to reflect on the living conditions of citizens.
This comes as the National Bureau of Statistics on Monday disclosed that the services sector pushed Nigeria’s economy to achieve two consecutive GDP growth of 3.19 percent in Q2 up from 2.98 percent recorded in the preceding quarter.
The GDP growth rate is higher than the 2.51 percent recorded in the corresponding quarter in 2023.
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According to the NBS data, the industry and services sectors contributed more to the aggregate GDP in the second quarter of 2024 compared to the corresponding quarter of 2023.
Only the services sector contributed 58.76 percent to the total GDP.
A further analysis showed that while the non-oil sector contributed 94.30 percent in real terms to the Nation’s GDP, the oil sector was 5.70 percent in Q2 2024.
Meanwhile, despite the GDP growth, economists query why the two consecutive rises in economic activities have not impacted the living conditions of Nigerians.
This collaborates with the Director General of the World Trade Organization, WTO, and Nigeria’s former Finance Minister, Ngozi Okonjo-Iweala’s recent statement that the country’s economic fortunes recorded a reversal since 2014 with steady GDP growth decline.
Recall that NBS July’s data indicated that inflation slowed down to 33.40 percent from 34.19 percent in June 2024.
Meanwhile, prices of goods and services have remained high for the majority of Nigerians despite policy interventions by President Tinubu’s government.
Speaking with reporters on Monday on the development, Prof Segun Ajibola, a renowned economist and former President and Chairman of the Council of Chartered Institute of Bankers said that Nigeria’s macroeconomics variables have yet to have the desired impact on the living conditions of Nigerians.
According to him, macroeconomic indicators such as GDP must touch the micro indices to change the narrative.
He urged that the government needed to gear towards transmitting the mechanisms between the macro level such as GDP and the micro level such as household income, and consumption.
He added that the country’s rate should be holistic and all-encompassing across the primary (such as agriculture, mining); secondary (manufacturing) and tertiary (services) sectors to have a balanced, fully integrated growth trajectory that can more easily translate to development.
“The truth however is that the macro variables may not have the desired impact on the living conditions of the people unless the macro performance is cascaded down to the populace, especially the masses that are eking out a living.
“The macro must touch the micro to change the narratives. It is the end that justifies the means.
“The improved growth rate is good news no doubt. As a country, we need to work on the transmission mechanisms between the macro level such as GDP and micro level such as household income and consumption, so as not to be entangled in the trap of growth without development, which is ravaging many developing nations.
“It is also important for growth to be driven across the primary (such as agriculture, mining); secondary (manufacturing) and tertiary (services) sectors to have a balanced, fully integrated growth trajectory that can more easily translate to development”, he told reporters.
On his part, a financial analyst and the Chief Executive Officer of SD & D Capital Management, Gbolade Idakolo said that the latest GDP growth is not a pointer that the economy is out of the woods.
Idakolo stressed that the figure is at variance with reality.
In his words, “The economy, in reality, is shrinking and needs a drastic measure to bounce back”, he told reporters.
“The NBS GDP is at variance with reality just like the inflation rate decline. The statistical data used by NBS does not take into cognizance the declining productivity in the economy.
“Most businesses are closing while some are downsizing or relocating because of the harsh economic environment.
“The CBN has continued to increase the interest rates while the Naira continues its downward slide against the US dollar.
“The government needs to rejuvenate the economy by implementing policies that would increase the capacity of SMEs, big businesses and the manufacturing sector.
“The single-digit interest rate loan facility promised by the Federal government should be jumpstarted, as well as the plans for the agricultural sector.
“The GDP figures are not a pointer that the economy is out of the woods. The government should be comparing NBS data with independent sources to have a fair idea of how the economy is performing”, he added.
Also, Prof Godwin Oyedokun, a don at Lead City University in Ibadan said the growth rate might differ across different regions of Nigeria.
“To gain a more comprehensive understanding of the factors driving the industrial sector’s growth, it would be helpful to analyze: Regional Variations: Growth rates might differ across different regions of Nigeria.
“Sector-Specific Data: A breakdown of growth rates within the industrial sector (e.g., manufacturing, construction, mining) would provide more insights.
“Business Surveys: Surveys of businesses in the industrial sector can reveal their experiences, challenges, and expectations.
“By conducting a more in-depth analysis, it would be possible to identify the specific factors contributing to the growth in the industrial sector and assess its sustainability in the face of ongoing challenges”, he told reporters.
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