- Casts doubts on Lagos’ claims on $90bn economy
Statistician General, National Bureau of Statistics, Dr. Yemi Kale, has said clashes between farmers and herdsmen has dragged down the gross domestic product (GDP) growth in the second quarter of the year. In fact, he hinted that owing mainly to this, coupled with ancillary factors, the GDP growth number for the second quarter of this year, scheduled for release on August 27, would be flat.
Kale, who was a guest on AriseNews Channel, yesterday, said, apart from the political uncertainty in the lead-up to the general elections in 2019,what contributed mainly to slowdown in the economy was the unimpressive performance of the agriculture sector, which is the biggest contributor to the GDP, owing to the recent clashes in many communities across the country.
“For example, we have seen challenges in Agric because of the clashes that are happening in different parts of the country. Obviously, if people cannot go to the farms, it is going to be a problem. Agriculture is not just crop, when you destroyed a farmland or even cattle rearing is also part of Agriculture, so the back and forth thing is affecting both crop production and livestock and Agriculture is the biggest part of our GDP and that is slowing down the economy,” he noted.
Kale said, although the agency was still putting finishing touches to the final figures, there was a high likelihood that the 1.95 per cent GDP growth rate posted in the first quarter would still be reported in the second quarter.
“I am not going to give the final figure because the work is not even completed but from the numbers I am seeing, it is looking quite flat. Surprisingly, but I expected the numbers should be much better it is looking very similar to the first quarter. I think the economy is still struggling out of recession and that is what the numbers are showing,” he said.
Kale nevertheless expressed the optimism that, despite the expected lacklustre performance of the economy in the second quarter, Nigeria would still meet the IMF and World Bank full year GDP growth projections of 2.1 per cent and 2.5 per cent respectively. But he added that uncertainty caused by the tensed political activities , may still determine the final figures for the year.
“For the entire year, it is still doable. The political season and most developing countries always affect the economy and it can be positive or negative,” he pointed out.
“Positive in the sense that if the atmosphere is not too toxic, you have increasing activities, politicians and people are spending towards the election and this leaves more money in the hand of the consumers or voters they can spend on economy, publishing get money because of the political activities. They tend to get more advertisements, the women in the market get money, so there is a lot more economic activities. So, the economy tends to benefit from that,” he explained.
“At the same time, when it is toxic, your foreign investors get scared, I think is part of what is happening in Nigerian Stock Exchange. Investors get terrified and they start pulling out their money, the local investors adopt wait and see, meaning we are not going to put in any money, let’s wait and see what is happening. Nobody wants to pump in money because they are bit concerned. Unlike the US economy, for example, where regardless of the noise being made, the economy is structured in a particular way, (so make as much noise as you want, the economy will continue to move), in Nigeria, we understand the system, before and after election, whoever wins, everybody is a bit nervous. Is he going to change the policy that has been working in the past years? Let me just hold my fund. So, when it gets toxic, it has a way of squeezing the economy, people stop hiring, because they don’t want to expand. They hold back all investment decisions, they want to see what is happening,” he added.
Meanwhile, Kale has expressed doubt about the claims that Lagos State, which touted itself as the fifth largest economy in Africa, was a $91 billion economy. “Personally, it is unlikely that the size of Lagos is that big, that will be 40 per cent of Nigeria, but Lagos does have a bureau of statistics that we have worked with before.”
Besides, the statistician general corrected the impression that the NBS did not have data on the states of the federation. He said, “Most of our indicators are broken down by states, although we publish national figures. Whether it is IGR, FAAC, unemployment, health education, the states are always there and we did the corruption thing as well, it was broken down to states. But in terms of states’ GDP, we have not compiled states’ GDP in Nigeria. Ironically, we just completed the first 11 states.”
On whether Lagos was one of the 11 states, he said, the nation’s commercial nerve centre was not one of them. “We selected one or two states according to geo-political zones. Lagos was meant to be, but opted out. It was meant to be a joint work between the states, their statistics offices and the NBS and at that point Lagos decided not to be part of it.”
“May be they will be part of the next set of states, which will be 25 states and it’s starting soon. But it doesn’t matter, as I used to say because once we do the other 35 and subtract it from the national, then we know the size,” he added.