Financial expert, Mr. Johnson Chukwu has called on the nation’s economic managers to leverage on the report given by the National Bureau of Statistics (NBS) on Nigeria’s exit from the economic recession to come up with how best to manage the economy so that the country don’t regress back into recession.
Chukwu who made this call in an interview with our correspondent in Lagos recalled that the NBS had a paramount duty to report the figures they got from the field which he said it had done.
According to him,”Like I said earlier, the growth was basically an oil growth, the other sectors, even though their growth were at a slower rate, it is the oil and gas sector that moved from a negative growth of contracting by 11.64% in the first quarter to a positive growth in the second quarter and that was what defined everything that happened.
“The other sector that grew , the energy sector was largely driven by what happened in the oil and gas sector because we produce associated gas. When there is improved production of crude, gas production is improved. Then in terms of energy coming from the national grid, there was no major improvement based on my own analysis because the capacity of the distribution and generation remained at 3,500 to 3,600 megawatts throughout last quarter.
“So, you can’t say they are coming from the national grid. If any improvement came, it came from either gas supply particularly to the industries that use gas to power their businesses”.
Chukwu who is the Managing Director of the Cowry Assets Management Limited however maintained that the improvement in the energy sector came from private generation and not from the national grid.
“The other sector was the financial services industry. We did not see growth in credit to the private sector from the banks, what we are seeing is contraction in growth to the private sector and growth in credit to the public sector. These are non productive lending, the banks are buying treasury bills.
“The other sector that may have recovered was the capital market but the capital market at the initial stage of recovery, until you move to the point of capital market activities, you are not going to see an instantaneous improvement in the overall aspect of the economy”, he said.
Chukwu added that on the average, the financial services sector recorded 11.8% growth rate while the energy sector recorded 35% growth rate which he said came basically from private generation.
He continued,” So, I have mentioned to you that manufacturing sector growth declined from 1.3% to 0.6%, the agricultural sector declined from 3.03% to 3.01%. So, these are the key sectors of the economy, agriculture accounts for about 23% of the GDP, trade was in contraction territory, accounts for about 17% of the GDP, telecomms in the contraction territory, it accounts for about 9% to 10% of the GDP, manufacturing was positive at 8.9% of the GDP.
“So, if you really want to put it in the proper context, just look at the non oil sector, the entire sectors put together only grew by 0.55% against a growth of 0.72% in the first quarter. This is a reduction in growth. So, if you put it into oil and non oil sectors, you can now appreciate that the recovery was largely from the oil sector”.
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