Nigeria Out of Recession
After a few quarters of negative growth that saw the death of businesses, the Nigerian economy is out of recession, but “conditions remain difficult for businesses,” World Economics, a London-based organization, said Tuesday.
“April Sales Managers’ Index data suggests that the Nigerian economy is continuing to grow out of the recession which saw 10 months of consecutive contraction in 2016,” it said in a release published on its website, NAN reported.
The organization, which is dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy, said this development was reflected in the growth of its April Sales Managers’ Index for Nigeria, which rose to 58.5% from 56.7% in March.
According to the report, the organization said: “April SMI data suggests that the Nigerian economy is continuing to grow out of the recession which saw 10 months of consecutive contraction in 2016. “The Market Growth Index grew to 58.5 in April as the monthly Sales Growth Index ticked up to 56.7, its highest value since 2015 and representative of rapid growth. Price inflation for April, which is tracked by the Prices Charged Index, remained high at 58.7–indicative of high levels of inflation. A slowing trend has, however, developed for the past nine months.”
Nigeria’s economy receded at the end of Q2 in 2016 after falling oil prices ate deep into the country’s earnings and caused the naira to weaken thereby causing inflation to spiral upward. Spates of attacks on oil installations in the Niger Delta by militants, who were protesting for better deals from the government, almost crippled oil production.
But the government’s recent engagements in the oil-rich region, spearheaded by Vice President Yemi Osinbajo, have seen attacks on oil facilities petered out, at least, for now.
Last Thursday, National Bureau of Statistics said the inflation rate dropped by 0.52% in March to close at 17.26%, the second decline recorded in two months.
“This is the second consecutive month of a decline in the headline CPI on a year-on-year basis,” NBS said in its report.
But World Economics noted that there are still issues the economy handlers need to fix before it can be out of the woods.