Nigeria is officially out of recession but some people are not happy
Nigeria is officially out of recession and it seems the twitter errconomists on TwitterNG are not happy. They can all shut the fuck up and go drink poison right now.
Look, a sub 0.55% GDP growth after 5 quarters of negative growth is nothing to write home about and we should be focused on recovery, escpecially since we were growing at average of 6% (powered almost entirely by oil price of over $100 per barrel and over 2 million bpd oil production). Also, Nigeria’s population is thought to be growing at 2.5% every year (as usual, take this with a pinch of salt — NOBODY really knows ANYTHING about Nigeria’s demographic data).
But will the government be right to highlight the return to positive growth after quarters of negative growth? Show me one country that will not celebrate this piece of good news in the myriad of bad economic stories and I will show you how big a liar you are. Politicians will ALWAYS celebrate every bit of positive news. Like i tweeted earlier, i would be more disappointed if Kemi Adeosun celebrates this GDP report since she is not a politician. Already, a statement credited to the Vice President’s office says “economic growth remains fragile and vulnerable to exogenous shocks or policy slippages”. I am happy with that.
I spent months tweeting about how wrong it is to focus overly on recession because all it takes to end recession is a growth of 0.01% , and that when that happens we might lose the big picture: lack of long term growth. That has not changed. Recession is over but recovery is harder and we must do it in a sustainable manner. The great recession in the US ended in June 2009 but recovery did not really start until much later. The GDP growth witnessed between 2012 and 2014 was largely due to oil price and relatively high local production and that is why even in early 2015, things began to go awry as soon as oil prices started crashing. Then this government made things worse mostly by their inaction, but things were always going to get worse with oil prices crashing to as low as $28 at some point. It is like earning N100,000 salary for four years but then having it slashed to N30,000 — you are always going to feel the impact “bigly”. The school fees and house rents and Aso Ebi are not going to respond to your new salary. If oil prices go back to >$100 (yeah, it will never happen again) and we manage to get oil production consistently over 2 million bpd, we will go back to the kind of growth we had before (this is because although oil and gas is less than 15% of Nigeria’s GDP, dollar income from oil is what fuels other critical sectors, especially manufacturing that needs a lot of foreign inputs. Investment in our stocks from abroad pales in comparison). But such growth is not sustainable for us long term. We need to focus on non-oil growth that is completely independent on oil price or production.
And that is where people who said we wasted the opportunity afforded by the recession (economists will always find something positive out of every bad situation) are somewhat right, although none of them has pointed out what realistically needs to be done, beyond the twitter tirade and numbered tweets mainly geared towards getting retweets and new followers. But it is what it is.
Where I disagree is saying people should not talk about this bit of positive news. You cannot spend twelve months talking about Nigeria officially entering recession and now ask people to keep quiet when it officially exits it. The road is still long and hard, but everyone could always do with a bit of positive news. Businesses and investors cling to every bit of economic news like a newborn to the mother and this is a good one.
That is why people who say the government should not tout this welcome news of Nigeria exiting recession should shut up. We’ve already spent 12 months consuming their apocalyptic predictions. Enough already.