Just as the National Bureau of Statistics (NBS) announced to the entire world that Nigeria has exited economic recession, the Managing Director of the Cowry Assets Management Limited, Mr. Johnson Chukwu has said that the real estate and the trade sectors are still in recession.
It will be recalled that the Nigerian economy last plunged into recession, a development which saw many states unable to meet their obligations to civil servants.
Speaking in an interview with Primetime Reporters in Lagos on Nigeria’s exit from the economic recession, Chukwu said,”Let us look at what happened in the last of quarters, you will see a lot of job losses, an economic growth rate of 0.55% will not lead to massive job creation and giving the fact that that economic growth that we recorded largely came from the oil and gas sector and the oil and gas sector is not known to be a job creating sector of the economy yet it contributes an average of 9% to the GDP but it does not create jobs because we have not domesticated the value chain in that sector. We don’t have refineries, we don’t have petrochemicals.
“So, any expansion in the oil and gas sector will eventually translate to expansion in crude production. So, you are not going to see job creation because the oil and gas sector has recovered”.
He added that the non-oil sector that should be the job creation segment of the economy unfortunately, was growing at a slower rate saying that while the non-oil sector expanded by 0.72% in the first quarter of 2017, it further contracted to 0.45% in the second quarter of 2017 which meant that the job creating capabilities in the non-oil sector that should create jobs was declining.
“If you want to drive job creation, you look at the agricultural sector. The agricultural sector grew by 3.35% in the first quarter and 3.03% in the second quarter. So, you are seeing a decline, the agricultural sector has been declining since the second quarter of 2016 when it was 4.5%.
“If you go to the manufacturing sector, it grew by 1.3% in the first quarter of 2017 only to grow by 0.6% in the second quarter of 2017. These are the key sectors that are supposed to create employment. The other employment creating sector of the economy, the real estate sector is still in a recession, the trade sector is still in recession. Trade accounts for about 17% of the GDP, real estate about 8%, they are still in recession. So, the sectors that will create jobs are not expanding. Even though they are expanding, they are expanding at a slower rate”, he said.
Mr. Chukwu maintained that one had to put things in proper context for him to understand that the fact that the economy turned positive may nit mean that jobs will be created and that the standard of living will improve.
He continued,”If you further drive it down , today, we are dealing with an inflation rate of 16.05%. The year on year inflation rate simply means that the value or cost of goods have increased by 16.05% when compared with the prices they were last year.
“So, for the average wage earner, the real value of his income is still deteriorating, it is still being eroded at the rate of 16.05%. So, his standard of living cannot be improved in one year, the purchasing power of his earning is eroding. So, the average man on the street is not yet likely to get any major relief just because the economy has turned around”.
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