I bet it was because of the slow rise in oil price that made Nigerian leaders declare that the country was out of recession last year. Since things were beginning to look rosy for the oil and gas sub-sector, they were quick to declare that the challenge is over…
But not for small and medium sized businesses and other businesses not in oil and gas sector. It is still hard for these types of businesses in Nigeria.
Nigeria may have exited recession but the majority of the economic components, the nonoil sector, are still largely in a recession.
Mr. Opeyemi Agbaje, the chief executive officer, RTC Advisory gave the indication at the weekend in a presentation titled: “the Nigerian economy and financial sector in 2018 at the FCMB media parley in Abuja.
He said Nigeria’s economy exit from the recession was largely dependent on oil prices recovery.
Based statistics from the Nigerian Bureau of Statistics (NBS) he said “our DGP group and the exit out of recession is about 100 percent oil process recovery. So the non-oil economy of Nigeria is still in recession. As at Q3 2017, which is the last available data, the non-oil economy of Nigeria still remains in recession but on the whole, the country exited recession because of oil prices growth” he explained.
“This is significant because when Nigerians say they don’t feel that the economy has exited recession, they are right. They are talking economics. Our economy is still in recession. The economy of Shell, Mobil Chevron, NNPC and co may have exited recession, but the economy of most sectors is still in recession. Poor manufacturing performance, sharply rising unemployment, fuel subsidy conundrum, and we are destabilizing the downstream sector of the economy” he noted.
According to him, the Nigerian economy has benefited from the rising oil prices and higher production because of relative peace from the Niger Delta. “Some macro indicators are getting better. We have improved GDP growth, stable exchange rate and convergence. We have $40bn foreign reserve. Six months ago, we were at some $23bn. Inflation is also looking better. You have indicators that have changed but you also have indicators that are still very bad’ he explained further.
On the fuel crisis he said, only full deregulation of the downstream sector can save the situation adding that investments are not happening in downstream sector because of government controls.