Nigeria economy pulled out from recession with latest report by the NBS showing the country’s GDP grew by 0.11% in 4th quarter of 2020
Nigeria’s Presidency on Sunday relied on the fourth quarter 2020 performance of the country’s economy to validate the success of its ongoing Economic Sustainability Plan (ESP).
The National Bureau of Statistics (NBS) in its latest Gross Domestic Product (GDP) Report said the aggregate value of goods and services in the Nigerian economy in the fourth quarter of 2020 grew by 0.11 percent.
With the latest performance, the NBS said the country’s economy pulled out from the recession it plunged into after two consecutive negative growths in the second and third quarters of the year.
In its reaction to the development on Sunday, the Presidency said this was a key indicator that the Federal Government’s Economic Sustainability Plan was working.
The Senior Special Assistant to the President on Media and Publicity in the Office of the Vice President, Laolu Akande, who was giving the update on the ESP progress so far said this was enough reason for Nigerians to expect more as the implementation of the plan gathers momentum.
Following the outbreak of the coronavirus, which devastated the global economy, the Executive Council of the Federation (FEC) on June 24, 2020 approved the ESP, whose committee Chaired by Vice President Yemi Osinbajo was inaugurated on March 30, 2020.
The terms of reference of the committee included the development of a plan to respond to the challenges posed by the COVID-19 pandemic; identify fiscal measures to enhance oil and non-oil government revenues; create a financial stimulus package for the Nigerian economy, and articulate measures to support the 36 States and the FCT, as micro, small and medium enterprises create jobs.
Pursuant to this mandate, the ESP rolled out a 12-month, N2.3 Trillion ‘Transit’ Plan between the Economic Recovery and Growth Plan (ERGP) and the successor plan to the ERGP.
Under the ESP, provisions were made for N500billion from Special FGN Accounts; N1.1trillion from the Central Bank of Nigeria (CBN) for finance structured lending; N334billion from external bilateral/multilateral sources and N302.9 billion from other funding sources.
In reviewing the latest GDP report, Mr Akande said with the intervention of the ESP, the economy was already on a rebound since the third quarter of 2020, adding that the fourth-quarter figures only confirmed its steady recovery.
“Like we explained late last year after the release of the third-quarter figures, the Economic Sustainability Plan, which was a calculated intervention by the Buhari Presidency, is driving the Nigerian economy in the right direction-upwards, and Nigerians can expect more because the administration is unrelenting in its determination to pursue the steady recovery and growth of our economy,” Mr Akande said.
The ESP, he maintained, was entering into an even more potent phase with the revving up of plans to install five million solar systems across the country and the social mass housing plan that would develop hundreds of thousands of affordable houses for ordinary Nigerians.
He said both aspects of the plan would yield several hundreds of direct and indirect jobs, besides giving the national economy a significant spur.
So far, Mr Akande said the Survival Fund provided funding for the MSMEs, artisans, transport workers, hundreds of thousands receiving cash stimulus, and the payroll support where an equal number of people running into hundreds of thousands employed by businesses are collecting N50,000 monthly.
He said the payroll support covers three months’ salaries for beneficiaries, with about 311,000 employees already receiving the support coming from 64,000 businesses nationwide and over 165,000 artisans also benefiting from the Survival Fund.
In all, he said the Survival Fund was on course to safeguard at least 1.3million jobs for Nigerians.
Also, he said the Government Off-take Scheme (GOS) was in the pipeline, to inject an additional N15billion to support Nigerian-owned businesses by off-taking a number of products in a bid to keep businesses alive and create jobs.
He said when operational, the GOS would cover products such as facemasks production, liquid soaps, disinfectants, hand sanitizers, and other processed foods and spices.
Altogether, the GOS would benefit 100,000 MSMEs, he said an additional 100,000 Nigerians would benefit from a one-off N50,000 MSME grant different from those already paid to artisans, transport workers and separate from the payroll support.
On the fourth quarter GDP figures, Mr Akande said the Presidency was of the view that they showed “an exit from the pandemic-induced recession.”
“This positive quarterly growth in Q4 2020 contributed to overall GDP, which contracted by -1.92% for the full year in 2020.
“This GDP report is important for a number of reasons. It is a reflection of the growing importance of the non-oil sector, as its contribution to GDP has increased from 92.68% in Q4 2019 to 94.13% in Q4 2020.
“The non-oil sector performance was mainly driven by growth in Information and Communication, as the pandemic meant greater use of ICT services.
“Growth in Agriculture, Manufacturing, Mining, Construction, and Real Estate also contributed to the improvement of the non-oil sector,” Mr Akande quoted the Presidency as observing.
The Presidency review, he added, noted however that “in contrast, the oil sector fell by -19.76% in Q4 2020 (6.36% in Q4 2019) as average oil production declined to 1.5 million barrels per day (1.5mbpd). This can be attributed to Nigeria’s compliance with OPEC+ quotas.”
The review also showed that “Nigeria’s response to the COVID-19 induced shocks, the Economic Sustainability plan and the timely revision of the Federal Government budget, were effective.”
The Nigerian Economy, he noted, outperformed various analysts’ expectations, including those of the International Monetary Fund (IMF) and World Bank, despite the impact of the lockdown, trade disruptions, #EndSars protests, and oil price volatility.
He said the government remain optimistic that with continued stability in crude oil prices, success of an imminent vaccine rollout, and continued effective implementation of the ESP, the economy would attain full recovery in the first quarter of the year.