THE National Bureau of Statistics (NBS) has reported that the Gross Domestic Product (GDP) growth of 2.3 per cent at Q4 2019 is below the growth expectation of 3.5 per cent in the 2019 approved budget.
The growth also falls short of the 4.5 per cent prediction by the Economic Recovery & Growth Plan (ERGP) target of 4.5 per cent.
The economic growth for 2019 was focused on three key sectors, namely Crop production, Information, Communication Technology and Crude petroleum & Natural gas.
The remaining 43 activity sectors had very minimal impact on economic growth in the year.
According to the Nigerian Economic Summit Group (NESG), ” For Nigeria’s economic growth to have an impact on job creation and poverty reduction, efforts must be channelled towards reviving key activity sectors, particularly those with strong linkages with job creation”.
The NESG identified 6 sectors that must be focused on to reduce unemployment and poverty in Nigeria. They include Manufacturing, Construction, Professional Services, Education, Health and Trade.
The NBS report showed that activities peaked in the agricultural sector since the closure of the land borders in August 2019.
But the trade sector was not active enough as it remained in a contraction territory throughout the last three quarters of 2019.
Domestic food production which is way lesser than demand, leading to high food inflation since September 2019 at a 21-month high of 14.9 per cent in January 2020, the NBS report showed.
The manufacturing sector showed a slow growth rate which reflects the high cost of doing business, arising from poor power supply, infrastructural deficit and policy inconsistency.
The Managing Director of Coleman Wires & Cables George Onafowokan said: “The cost of bringing a container from the Nigerian border into Lagos is very high, which has a lot to do with government policies”.
According to the NESG, due to the overdependence on imported raw materials, the land border closure has reinforced a higher cost of operations of the industry players.
According to several industry sources, manufacturers that export to neighbouring countries was affected by the land border closure.
The NESG predicted that the early passage of the 2020 budget and a higher capital budget of N2.5 trillion coupled with the commitment shown by the Bankers’ Committee to partner with the federal government to finance infrastructural projects, there would be an improvement in the performance of the construction sector.