An economist, Professor Akpan Hogan Ekpo, has said the Nigerian economy is currently in recession, after studying relevant macroeconomic and social indices.
In economics, it is possible to ascertain that an economy is in recession through the comparative study of statistics like the Gross Domestic Product (GDP), unemployment rate, inflation rate, among others.
Ekpo during his delivery of a keynote paper in Lagos yesterday at the inaugural lecture of the Centre for Financial Journalism said: “The morphology of growth indicates an economy with positive growth trajectories but no development,”
According to the academician who is also the Director General of West African Institute for Financial and Economic Management, “The high rates of unemployment, combined with reduced output in two quarters of 2015, suggest an economy in the sphere of stagflation, a prelude to a recession.”
He noted that GDP numbers, as provided by the National Bureau of Statistics (NBS), experienced significant declines in 2015.
“The growth of the agriculture sector’ dropped from 4.47 per cent in the third quarter of 2014 to 3.46 per cent in the same quarter of 2015, a decrease of 1 per cent,” he said.
He also noted that the industrial sectors contributions to GDP declined from 24.20 per cent in the third quarter of 2014 to 23.5 per cent in the same quarter of 2015.
“This is an unhealthy situation given the importance of manufacturing in driving growth and development as well as job creation,” he explained.
Although inflation had been steadied at single digits, due to the central bank’s tight monetary policy, Ekpo noted that the rising rate of unemployment makes mockery of the positive trajectory, currently standing at almost 27 per cent.
He lambasted the NBS for trying to shy away from this sordid fact in its latest unemployment rates that suggests the economy is close to full employment.
The NBS had pegged the rate at 6.4 per cent in the 1st quarter of 2015 and 8.2 per cent in the second quarter, but that was after ascribing higher rates to underemployment, which is simply a milder form of unemployment.
Meanwhile, while admitting that recessions are inevitable in any capitalist economy, Ekpo noted that the President Muhammadu Buhari government must put in place effective policies to combat the misery it brings upon the common man. The professor went on to advocate policies that would prioritise massive investment in hard infrastructure, employment generation, investment in housing construction, rebuilding the public school system, building strong institutions, and an aggressive monetary and fiscal policy.
“It is expected that President Buhari has a committed team that would put the economy on the path of sustained growth and inclusive development,” he said.