FG plans economic strategy review to avert recession

The Federal Government will soon commence a review of its economic strategies following the poor growth, which the economy recorded in the first quarter of the year.

The move, a Presidency source said, became imperative in order to address some of the structural challenges, which the current administration might not have anticipated during the formulation of its economic agenda.

Experts say Nigeria’s economy risks falling into recession after it shrank in the first quarter of 2016 as outputs in the manufacturing, financial, real estate, oil and gas sectors fell significantly.

The nation’s Gross Domestic Product, which measures the output of an economy, contracted by 0.36 per cent from a year earlier, the National Bureau of Statistics said in an emailed statement on Friday.

This compares with a GDP growth rate of 2.11 per cent recorded in the last quarter of 2015.

The last time Nigeria recorded such a negative growth rate in the GDP was in 1995, when it grew by -0.3 per cent, according to World Bank statistics.

The source, who spoke on condition of anonymity, said that the economic team of the Federal Government would soon meet to analyse the growth rate in order to come up with more viable strategies.

For instance, the official said while the expansionary fiscal budget currently being implemented would kick-start some of the strategies, the time lag between the injection of the planned stimulus and the delivery of its outcomes was a source of concern.

Analysts are of the view that it usually takes about two to six months between when an economic strategy is unveiled and when its impact is felt.

The source said, “You will recall that just two days ago, the NBS GDP growth data showed that the economy posted a negative growth rate of -0.36 per cent. The Federal Government will review and analyse the latest growth data for those issues, which may not have been anticipated.

“Some of the factors that led to this are what we have previously highlighted; that we inherited huge government borrowing that was not invested in the areas of growth.”

When contacted on what the government would do to reposition the economy, the Special Adviser on Media to the Minister of Finance, Mr. Festus Akanbi, told our correspondent on Sunday that the strategy would reset the economy on the path of sustainable growth.

He said, “Our strategy remains to reset the economy towards a path of sustainable growth. We are confident that the economic strategy, which we have begun, will start to fundamentally address the structural challenges facing our economy.

“We have no doubt that this approach will ensure that the fundamentals and outlook for the Nigerian economy remain positive.”

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