Economic Recession 7 signs that storm is almost over for Nigeria

Nigeria slipped into an economic recession in 2016. The country is now firmly on its way out.

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Dr. Yemi Kale, Statistician General of Nigeria and CEO of National Bureau of Statistics play

Dr. Yemi Kale, Statistician General of Nigeria and CEO of National Bureau of Statistics

(newsexpressnigeria.com)
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In the second quarter of 2016, Nigeria plunged into an economic recession.

Two quarters of consecutive negative growth was all it took.

Years of wasteful spending and corruption had finally caught up with the continent's biggest market.

It may be early days yet, but here are 7 signs you can hold onto if you are Nigerian or doing business in Nigeria:

1 Latest Gross Domestic Product (GDP) figures from the National Bureau of Statistics (NBS) present a ray of light at the end of what has been a very dark tunnel for the average Nigerian.

The economy contracted by 0.52 percent in the  preceding quarter. That means we are still in a recession but gradually emerging out of it as well.

It's better to view the glass as half full at this point.

Yemi Kale play Dr Yemi Kale is Statistician General of the federation (Information NG)

 

Recall that in Q3 2016, the economy shrank by 2.34 percent.

In Q4 2016, the economy shrivelled by -1.3 percent.

In Q1 2017, GDP growth stood at -0.52 percent.

Look at those figures again. There's been a decrease in the negative ratios.

In two or more quarters, Nigeria's economy will be back on a positive trajectory. Smart money is on that happening in Q1 2018.

Headline inflation remains at double digit, but a reduction to 16.25 percent from 18 percent is some progress.

Things are looking up again, surely.

2. Nigeria has been talking about diversifying the economy away from oil since I was a toddler.

Well, maybe now, with the price of oil plunging in the international market, it's diversify or burst for Nigeria.

Agriculture exports play

Agriculture exports

(NBS)

 

According to the bureau of statistics, the manufacturing sector grew by 1.36 percent in Q1 2017. 

In Q4 2016, the manufacturing sector declined by 2.5 percent.

The manufacturing sector declined by 7 percent in Q1 2016.

Manufacturing exports grew by 45 percent in Q1 2017.

Agriculture export grew by 82 percent in Q1 2017. Raw material exports grew 25 percent in Q1 2017 over Q4 2016.

Nigeria is indeed diversifying. It's got no choice.

3. Investors are making a return to Nigeria, thanks to the new flexible exchange rate policy of the central bank of Nigeria.

The apex bank is on the verge of conflating all forex markets by pumping more dollars into the arena.

Nigeria foreign trade stats play

Nigeria foreign trade stats

(NBS)

 

As a consequence, speculators are having a hard time and hoarders of hard currency are now out of business.

The Naira has been appreciating against the Dollar in recent weeks and sustaining influx of cash by the CBN, will be key.

Bonds issued by the federal government have been oversubscribed; an indication that investors still regard the Nigerian market as a cool place to do business.

4. Thankfully, the 2017 appropriation document, otherwise known as the budget, has been passed and assented to by the legislature and executive respectively.

The N7.44T budget has an infrastructure component of N2.18T. That's some 30 percent of the total budget.

N350B has so far been released for critical infrastructure projects.

A country's economy is only as solid as its infrastructure backbone.

Foreign trade stats play

Foreign trade stats

(NBS)

 

We may be a long way off, but if the budget is duly and transparently implemented, we may well be on our way out of recession before you know it.

And that's a big IF right there.

5. The floor of the Nigeria Stock Exchange (NSE) is buzzing again.

All Share Index (ASI) and Market Capitalisation have each risen by roughly 25 per cent since the turn of the year.

The ASI hit a 24-month high in the second week of June 2017.

ALSO READ: Nigerian economy on its way out of recession

Investors are having renewed interest in the Nigerian market, believe it or not.

6. Nigeria's crude oil production levels have been stable for a while now, thanks to a semblance of peace in a restive Niger Delta region.

play Acting president Osinbajo and budget minister Udoma (Punch)

 

Oil is being pumped out of the Forcados terminal again and disruptions to Escravos are now a trickle .

Crude oil production levels are now at their highest levels in 12 months.

Oil may be a dying commodity, but Nigeria still requires petro-dollars to revive other ailing sectors of the economy.

Yeah, we know, that really sucks.

7. Foreign exchange reserves are now in excess of US$30B. Juxtapose that with US$24B of reserves in October 2016.

Nigeria may just be making gains on the economic front, however slowly.

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