Tag Archives: GDP

GDP Slump: Time to do some things differently – Rewane Bismarck

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Notable economist and adviser to the Federal Government, Bismarck Rewane, on Monday said the latest Nigeria Bureau of Statistics report on the economy should push the country to start “doing some things differently.”

Nigeria’s Gross Domestic Product (GDP) decreased by six percent in real terms in the second quarter of 2020, the NBS said Monday morning.

According to Rewane, the decline was “surprising and concerning” but not “alarming at this point in time.”

“The truth is that the economy had its pre-existing conditions in Q1 and the lag between the slow down and the contraction was underestimated by all analysts,” Mr Rewane said in an interview with Channels Television on Monday.

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He pointed out that the Federal Government’s stimulus plan for the economy was inadequate to cover for the shortfall recorded by the NBS.

“We have a N2.5trn equipment to fight a 12trn contraction,” he said. “So the limitations and inadequacies and inappropriateness of the tools, compared to the problem we have, is stacked.

“So we are saying that the move from a slowdown into a contraction was more than we expected. The tools that we have at our disposal are inadequate. The stimulus that is required to take us out of this equation is going to be much more than we expected. And we are going to have to take some measures.”

Mr Rewane added that the country was now faced with a quadrilemma, a situation in which a choice must be made between four undesirable options.

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“The first variable we are looking at is recession, negative growth,” he said. “The second variable is high inflation, which is almost 13 percent.

“The third variable is high unemployment; even though the unemployment numbers are at 28 percent, we think that it is much more than that. And finally, we have weaknesses in currency.

“So we are having external weaknesses and vulnerabilities, slow growth, high unemployment, and, more than anything else, contraction in economic activity.

“Now we are going to move away from the monetary policy complement that we have, stimulate the economy with greater catalyst, and do some things differently.”


#Newsworthy…

Breaking: Nigeria’s GDP in second quarter slumps by 6.10%

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Nigeria’s Gross Domestic Product (GDP) decreased by six percent in real terms in the second quarter of 2020, according to the Nigeria Bureau of Statistics.

This was contained in the NBS’s GDP report published on Monday.

The retreat ends a three-year trend of low but positive real growth rates recorded since the national economy emerged from recession in 2017.

According to the NBS, the decline was “largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.”

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Nigeria essentially shut down its economy in March – restricting inter-state travel, closing worship centres, schools and markets – as parts of efforts to keep the spread of the novel coronavirus under control.

Nigeria’s Gross Domestic Product (GDP) decreased by six percent in real terms in the second quarter of 2020.

“The efforts, led by both the Federal and State governments, evolved over the course of the quarter and persisted throughout,” the NBS said.

The oil sector, which accounts for a large percentage of the country’s revenues, recorded negative growth of 6.63 percent, “indicating a decrease of –13.80%
points relative to the rate recorded in the corresponding quarter of 2019.”

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The non-oil sector also declined by 6.05% in real terms during the second quarter.

“It was the first decline in real non-oil GDP growth rate since Q3 2017,” the NBS said.

Not a surprise
The economy’s decline did not come as a surprise to many as the coronavirus pandemic has gutted economic productivity across the world.

The report will be “negative,” Presidential aide, Tolu Ogunlesi, tweeted on Sunday. “Tomorrow we find out to what degree.”

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The third-quarter results have also been projected to be negative, which will officially land the economy in a recession.

A recession is only declared after two consecutive quarterly contractions.

In May, Finance Minister, Zainab Ahmed, predicted that the country was heading towards a recession.

“On the economy, COVID-19 has resulted in the collapse in oil prices,” she said after a National Economic Summit meeting. “This will impact negatively, and the impact has already started showing on the federation’s revenues and on the foreign exchange earnings.”


#Newsworthy…

COVID-19: US economy collapse by 32.9% in second quarter

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The US economy collapsed in the midst of the coronavirus pandemic in the April-to-June period, contracting 32.9 percent in the second quarter, the government reported Thursday.

The decline, though slightly less bad than expected, was the worst on record for the world’s largest economy, dating back to 1947.

However, the Commerce Department figures are an annual rate so not comparable to the quarterly contractions reported in other advanced economies.

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Compared to the same quarter of 2019, economic activity fell 9.5 percent.

The plunge in GDP was driven largely by the drop in consumer spending, the largest component, which fell 34.6 percent annualized, according to the first estimate for the second quarter.

In this file photo taken on June 29, 2020, The “Fearless Girl” statue stands in front of the New York Stock Exchange (NYSE) at Wall Street in New York City. Angela Weiss / AFP

After a 5.0 percent drop in the first three months of the year, economists had been expecting the damage from COVID-19 to contract activity by 35 percent or more amid the nationwide halt to travel and much business, which caused tens of millions of jobs to be destroyed.

The data show trade also took a huge hit, with exports falling just over 64 percent, and imports down 53.4 percent.

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But personal income got a boost of $1.4 trillion in the quarter from the government emergency spending measures that provided payroll funds for businesses and direct unemployment payments to workers.

The annualized data assumes the damage wrought in a single quarter will play out over the entire year, but economists expect a rebound in coming months.

However, the hopeful signs in May and June have given way amid a resurgence of virus cases in July that has forced authorities in some states to reimpose restrictions.

US stocks futures were down a bit less than one percent following the data.


#Newsworthy…

The best for growth in Nigeria, Border Closure – Rev. Fr. Kizito Fogos


Rev. Fr. Kizito Fogos, the Parish Priest of Church of Assumption Chongo’ Pyeng, Jos, says the decision by the Federal Government to close the nation’s land borders is the best for the country.

Fogos made the remark in a sermon on Sunday in Jos, adding that the decision would make Nigeria realise its full potential and ensure the growth of its economy, N.Rs culled.


According to him, the closure of the borders will also make Nigeria become a self sufficient economy, where it consumes what it produces.

The cleric, who noted that the current hardships being experienced as a result of the closure were temporary, said the long term benefits would be enormous.


“I am totally in support of the government’s decision to close all our land borders because it will make us realise our full potential.

“With this, Nigeria will no longer be a dumping ground where other countries only export into it expired products; products that are even harmful to our health.


“It is the frozen items that have been preserved with harmful chemicals and are imported to us to consume, or the expired tyres that kill us on the highways.

“The hardships and challenges that come with this decision are temporary, but the long term benefits will be awesome. So, the decision remains the best,” he said.

President Muhammadu Buhari


The cleric, however, advised the government to put modalities on ground to support the growth of local industries, adding that such move would enable them to meet the high demand for locally produced goods.

He also advised Nigerians to patronise locally produced goods in order to promote local industries and grow the country’s Gross Domestic Product (GDP).


#Newsworthy…