Following the recent announcement by the National Bureau of Statistics (NBS) that Nigeria has exited recession, a financial expert, Mr. Johnson Chukwu has said that the exit of the country out of recession does not necessarily translate to improved standard of living for citizens or to low cost of living.
Chukwu who made this assertion in an interview with Primetime Reporters in Lagos observed that”if people are waiting, expecting that their fortunes would have improved because the economy improved by 3.5%, I think that that expectation will be dashed until the economy begins to grow at materially above the population growth rate”.
According to him,” If you look at an economic recovery that we really experienced in the second quarter of this year 2017, you will observe that the growth was 0.55%, if you compare that to the population of the country which is growing at about 2.6% per annum as against the GDP growth of about 0.55%, you will observe that one simple economic fact and that is that the standard of living of people will continue to deteriorate because the addition to production activities is less than the addition to head count.
“So, we should expect an economic growth rate that is in the range of 5% to 7% consistently for a number of years for people to be taken out of poverty and for people to see a remarkable improvement in their standard of living”.
He however described the announcement by the NBS that Nigeria had exited economic recession as a positive development adding that it gave policy makers, business operators and households the confidence that the economic prospects of the country was improving and that return on investment should also improve as it showed that the economic prospects were positive.
“So, on a balance, I will say it is a very positive development. It was mist expected that the country will exit recession this year and so, it wasn’t strange that we have exited. If you look at the trend in the economic data that has been produced in the last three quarters, you will observe that in the first quarter, the economy declined by 0.91%, though the figure initially came at 0.55% negative but it was later reversed to 0.91%.
“So, most analysts expected that before the end of the year, the country will exit economic recession. So, it was a most expected but quite a cheering news”, he said.
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