The Minister of Finance, Mrs. Kemi Adeosun, on Wednesday admitted that Nigeria was in its worst possible time with the Gross Domestic Product figures for the 2016 second quarter released by the National Bureau of Statistics showing the nation’s economy now in recession.
The nation’s external reserves fell by 2.86 per cent to $25.45bn on August 29, 2016, the latest report from the Central Bank of Nigeria showed on Wednesday. The foreign exchange reserves stood at $26.2bn at the end of July.
The continued scarcity of foreign exchange also pushed the naira to an all-time-low of 420 against the United States dollar at the parallel market.
The development came hours after the economy entered recession, according to the data released by the NBS.
Adeosun said the nation had a long way to go and the government was not deceiving itself that all was rosy.
She spoke with State House correspondents at the end of a meeting of the Federal Executive Council held inside the Presidential Villa, Abuja.
“It’s the worst possible time for us. Are we confused? Absolutely not,” the minister said.
She identified some of the ways the country could get out of recession to include diversification of the economy and investing in capital projects.
The minister said, “I think that we have a long way to go. We’re not confused and we’re not deceiving ourselves that everything is rosy. It’s not.
“It’s a difficult time for Nigeria but I think Nigeria is in the right hands and if we can stick with our strategy… We still have some adjustments to make. I think we need to make some adjustments in monetary policy.”
In the report released by the NBS, the GDP growth rate slid further from -0.36 per cent in the first quarter to -2.06 per cent.
It also released the capital importation report for the second quarter, the unemployment statistics, the inflation rate for July and the labour productivity report for July.
All the reports painted a negative picture of the Nigerian economy with inflation rising to 17.1 per cent from 16.5 per cent; the unemployment rate increasing to 13.3 per cent from 12.1 per cent and the investment inflows dropping to the lowest levels at $647.1m from $710m.
In terms of the GDP, the negative growth rate recorded in the second quarter of the year is a confirmation of the predictions by the Federal Government and economists that the country was heading for a recession.
A recession is defined as a significant decline in activities across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale retail trade.
The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s GDP.
In nominal terms, the report put the country’s GDP at N23.48tn, adding that this was 2.73 per cent higher than the second quarter of 2015 value of N22.86tn.
The NBS, in the lastest report, said, “In the second quarter of 2016, the nation’s Gross Domestic Product declined by -2.06 per cent (year-on- year) in real terms.
“This was lower by 1.70 percentage points from the growth rate of -0.36 per cent recorded in the preceding quarter, and lower by 4.41 percentage points from the growth rate of 2.35 per cent recorded in the corresponding quarter of 2015. Quarter-on-quarter, the real GDP increased by 0.82 per cent.”
The report stated that most of the sectors recorded huge declines in their GDP growth rates during the second quarter.
Some of them are oil, which recorded a negative GDP growth rate; manufacturing, -1.02 per cent; financial sector, 2.8 per cent; transport, 6.18 per cent; construction, 3.77 per cent; and real estate, 2.12 per cent.
For the manufacturing sector, the report said its drop in the GDP performance was as a result of high operating votes, which impacted negatively on capacity utilisation.
It said, “Nominal GDP growth in manufacturing in the second quarter of 2016 was recorded at negative 1.02 per cent (year- on
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