By Chinedu Eze
Despite the fact Nigeria has exited recession, the countryâ€™s economic growth is still fragile because it is not based on increase in manufacturing, boost in agriculture or mining but on precarious oil prices and improved production.
This was the submission of international business analyst, Christian Udechukwu, who spoke on ARISE Television, a THISDAY Newspaper sister broadcast network yesterday.
Udechukwu said the country was able to get out of recession because of the peace the Vice President, Prof. Yemi Osinbajo, brokered between the Niger Delta militants and the federal government, noting that the sabotage in oil production reduced oil export to about 1.3 million barrels per day (mbd), which grossly reduced the nationâ€™s revenue from product and forced the country into recession, but today Nigeria exports about 2.1 mbd and this improvement in oil receipts has boosted the countryâ€™s economy.
He, however, regretted that in the key areas of the economy like agriculture, manufacturing and power supply, there is not much to cheer and that is why the nationâ€™s economic growth is precarious.
The economist said a boost in power supply could significantly help the manufacturing sector and observed that with stability in the Niger Delta there is improved gas supply to power gas facilities but unfortunately the country faces challenge in transmission and distribution due to inadequate infrastructure.
According to Udechukwu, stability in foreign exchange due to the efforts of the Central Bank of Nigeria (CBN) and the banks has contributed in improving the economy and the support the agricultural sector is getting from the federal government indicates that in the near future the sector would contribute more to the countryâ€™s economy so there should be more investment in agriculture and government should further encourage big farming, as a move away from the current subsistent farming which dominate the sector.
â€œThere are other challenges like low intensity conflicts in North-west, currently in South-east and other parts of the country, which create instability but hopefully these will be overcome by government. Currently strike actions are affecting production in the economy but we are seeing hope in agriculture but we need more big farmers. The country is still largely on subsistent farming. There is hope that when the key areas of the economy improve, Nigeriaâ€™s economy would pick up again. After all, about three years ago Nigeriaâ€™s economy was the fastest growing economy in Africa,â€ Udechukwu said.