Renowned Capital Market Professor, Uche Uwaleke has said that the time was ripe for Nigeria to reset its faulty economic structure, following the 2.51% Gross Domestic Product (GDP) recorded (year-on-year) in real terms in the second quarter of 2023, as reported by the National Bureau of Statistics (NBS).
Prof. Uwaleke noted that the identified growth pattern, weighted in favour of the services sector was not healthy for a developing economy such as Nigeria.
NBS reported that the 2.5% growth rate recorded in Q2, 2023, was lower than the 3.54% recorded in the second quarter of 2022 and may be attributed to the challenging economic conditions being experienced.
The performance of the GDP in the second quarter of 2023, according to NBS, was driven mainly by the Services sector, which recorded a growth of 4.42% and contributed 58.42% to the aggregate GDP.
The Bureau said, the agriculture sector grew by 1.50%, an improvement from the growth of 1.20% recorded in the second quarter of 2022, while the growth of the industry sector was -1.94% relative to -2.30% recorded in the second quarter of 2022.
NBS said, in terms of share of the GDP, agriculture, and the industry sectors contributed less to the aggregate GDP in the second quarter of 2023 compared to the second quarter of 2022.
Reacting to the Q2 2023 real GDP performance, Prof. Uwaleke said, the growth was driven by the Non-oil sector.
He said, the oil sector tanked considerably on account of a reduction in crude oil production.
However, he said, the Non-oil sector performance was powered by the Services sector (4.42%), especially by Telecoms, Trade, and Financial Services.
The first capital market Professor in Nigeria said, the industry sector appeared hugely impacted by rising inflation during the quarter. The growth rate was negative at -1.94% compared to 0.31% in Q1, 2023
Uwaleke further said, that the sudden removal of fuel subsidy in May could be blamed for the plunge in the Transportation sector by over 60 points from Q1 2023.
He also said that the Agriculture sector (comprising 4 activities, though dominated by crop production) printed a slightly improved performance over Q1. But, (shy of 2%) is still far from its pre-COVID-19 levels.
“In my view, this identified growth pattern, weighted in favour of the services sector, is not healthy for a developing economy such as ours. Little wonder, economic growth does not appear inclusive reflecting in rising unemployment and poverty levels (new NBS methodology attempts to mask this).
“It’s time we reset this faulty economic structure, leveraging technology, in favour of the productive sectors: Industry and Agriculture”, the former Imo State Commissioner for Finance added.