Nigeria sustains slow but continuous recovery, GDP grows by 0.51% in Q1

Nigeria's economy demonstrated an encouraging growth of 0.51% in the first quarter of this year, marking the second consecutive quarter of growth, which points towards a slow but steady recovery, as reported by the National Bureau of Statistics. Bismarck Rewane, the CEO of Financial Derivatives and a member of the Presidential Economic Advisory Council, along with Immanuel Odiaka, the CEO of EcoPcapital, shared their insights on the recent GDP numbers in a CNBC Africa interview. Rewane highlighted how this growth should be viewed within the context of the country's potential GDP growth rate of 8%, emphasizing that the current growth rate of 0.51% still falls below this threshold. He pointed out that the sectors that showed significant growth, such as agriculture and manufacturing, are crucial for employment generation. However, he also noted the challenges faced by sectors like oil refining and transportation, which saw a decline in employment opportunities. The conversation then shifted towards inflation and food security, with a focus on the need for temporary food imports to mitigate the high food inflation rate, which stands at over 20%. Rewane suggested a balance between importation and maintaining investments in security to address both food inflation and national safety concerns. Immanuel Odiaka added to the analysis by acknowledging the resilience of the manufacturing sector in the face of challenges like inadequate power supply. He also commended the sector for its growth amidst the global economic slowdown caused by the COVID-19 pandemic. While acknowledging that the manufacturing sector still faces issues with foreign exchange availability and interest rates, Odiaka highlighted the positive impact of initiatives like the CBN's anchor borrowers' program on agriculture and industry. The discussion then delved into lesser-known sectors that have been showing promising growth, particularly the creative industry and entertainment sector. Despite the impact of COVID-19 restrictions and security challenges, these sectors have displayed resilience. Rewane also touched upon the recent improvements in the foreign exchange market, emphasizing the need for efficiency and transparency in forex transactions. Looking ahead, both experts expressed cautious optimism for the remainder of the year, citing the importance of addressing security issues to boost agricultural productivity. They highlighted the need for a coordinated effort between fiscal and monetary policies to support economic growth. Odiaka emphasized the significance of ensuring a conducive environment for farmers during the upcoming planting season, underscoring the critical role of security in agricultural activities. In conclusion, the slow but continuous growth of Nigeria's economy in the first quarter of 2021 provides a glimmer of hope for the nation's economic recovery. While challenges persist, particularly in sectors like transportation and security, strategic policy measures and enhanced efforts towards improving agricultural productivity and security could pave the way for a more robust economic performance in the coming months.