Some financial experts and economists have told President Bola Tinubu that Nigeria’s 3.19 percent rise in Gross Domestic Product in the second quarter of 2024 did not reflect the reality of the living conditions of citizens.
The National Bureau of Statistics had in its second quarter report released on Monday, indicated that the services sector pushed Nigeria’s economy to achieve two consecutive GDP growth of 3.19 percent in Q2 up from 2.98 percent recorded in the first quarter.
The GDP growth rate is higher than the 2.51 percent recorded in the corresponding quarter in 2023.
According to the NBS data, the industry and services sectors contributed more to the aggregate GDP in the second quarter of 2024 compared to the corresponding quarter of 2023.
Only the services sector contributed 58.76 percent to the total GDP.
A further analysis showed that while the non-oil sector contributed 94.30 percent in real terms to the nation’s GDP, the oil sector’s contributed 5.70 percent in Q2 2024.
Economists however said the two consecutive rises in economic activities has not impacted the living conditions of Nigerians as prices of goods and services remain very high nationwide.
Prof Segun Ajibola, former President and Chairman of the Council of Chartered Institute of Bankers, said that Nigeria’s macroeconomics variables have not made the desired impact on the living conditions of Nigerians.
According to him, macroeconomic indicators such as GDP must touch the micro indices to change the narrative.
He said that real impact must be felt in household income and consumption.
Prof Segun said all sectors – agriculture, mining, manufacturing and services – must present balanced, fully integrated growth trajectory that can easily translate to development.
“The truth, however, is that the macro variables may not have the desired impact on the living conditions of the people unless the macro performance is cascaded down to the populace, especially the masses that are eking out a living.
“The macro must touch the micro to change the narratives. It is the end that justifies the means.
“The improved growth rate is good news no doubt. As a country, we need to work on the transmission mechanisms between the macro level such as GDP and micro level such as household income and consumption, so as not to be entangled in the trap of growth without development, which is ravaging many developing nations.
“It is also important for growth to be driven across the primary (such as agriculture, mining); secondary (manufacturing) and tertiary (services) sectors to have a balanced, fully integrated growth trajectory that can more easily translate to development”, he added.
On his part, a financial analyst and the Chief Executive Officer of SD & D Capital Management, Gbolade Idakolo said that the latest GDP growth figure was at variance with reality.
“The economy, in reality, is shrinking and needs a drastic measure to bounce back.
“The NBS GDP is at variance with reality just like the inflation rate decline. The statistical data used by NBS does not take into cognizance the declining productivity in the economy.
“Most businesses are closing while some are downsizing or relocating because of the harsh economic environment.
“The CBN has continued to increase the interest rates while the Naira continues its downward slide against the US dollar.
“The government needs to rejuvenate the economy by implementing policies that would increase the capacity of SMEs, big businesses and the manufacturing sector.
“The single-digit interest rate loan facility promised by the Federal government should be jumpstarted, as well as the plans for the agricultural sector.
“The GDP figures are not a pointer that the economy is out of the woods. The government should be comparing NBS data with independent sources to have a fair idea of how the economy is performing”, he added.
Also, Prof Godwin Oyedokun, a don at Lead City University in Ibadan said the growth rate might differ across different regions of Nigeria.
“To gain a more comprehensive understanding of the factors driving the industrial sector’s growth, it would be helpful to analyze: Regional Variations. Growth rates might differ across different regions of Nigeria.
“Sector-Specific Data breakdown of growth rates within the industrial sector (e.g., manufacturing, construction, mining) would provide more insights.
“Business Surveys in the industrial sector can reveal their experiences, challenges, and expectations.
“By conducting a more in-depth analysis, it would be possible to identify the specific factors contributing to the growth in the industrial sector and assess its sustainability in the face of ongoing challenges”, he said.