So a couple of macroeconomic reports poured in over the last few months, and I’ve taken a couple of NBS’ latest infographics and tried to see what tale they tell of the economy. Well, the story it tells isn’t rosy – and that’s an understatement. Let’s go through a couple and then you can decide for yourself.
The second quarter reveals the third consecutive rise in unemployment rate since the third quarter of 2014. Oh, by the way, underemployment also increased. Predictably, the youth population of the work force is the most affected. Also, consider that this is all happening as the labor force is increasing, meaning more people are getting churned into a system full of unemployed and underemployed. Remember when you’d come late to class and see the ones who came earlier kneeling down at the back of the class, motioning you to join them? Yes. Very similar process.
Job creation is that other side of unemployment – the good side. The side that certainly takes the largest share of testimonies in churches. The side that makes you sing ‘I don get alert, na Godwin!’. Unfortunately…the elections have ended, and so have the numerous informal sector jobs that it created…and gone with them are the numerous alerts. The quarterly fall was huge (70%), but the yearly fall also tells its own story (45% fall) – last year around the same time was a better time to get a job. If you’re a corper, I wish you best of luck finding a job. I hope you’re thinking of a business to start, cause eh…finding a job in this current economic clime will be harder than finding Dangote’s phone number.
Inflation in July remained at 9.2% – similar to June, but outside of the 9% band. Record high year for food inflation due to a rise in the price of imported food. Remember that ridiculous fuel scarcity? That also contributed to the rise in inflation. Well, you can expect your landlord to review your rent soon – especially if you live in Lagos.
Two quarters straight and capital importation has remained low. Foreign exchange volatility and a decline in oil price have kept foreign investors away. Can you blame them for holding their money back? Nope. It’s like a man who pours his garri into the ocean and expects it to swell. Biko, these investors are wiser, they are waiting to make sure they can see where their garri goes.
What does all this portend for the nation’s growth?
The second quarter GDP report comes out tomorrow. I have no idea what it’ll be, but if you just read through all the macroeconomic indicators above, I’m certain I don’t need to point out what direction our GDP will be headed tomorrow.
So if it turns out to be as bad as the other macroeconomic indicators that have come out in the last couple of weeks, don’t be too shocked. You’re allowed to be shocked, but not too shocked cause that indicates you didn’t see it coming when it was quite obvious. You’re shocked when soldier slaps you, but you’re not THAT shocked because you know it’s a possibility – sadly.
Some will politicize the figure and call it false, but let’s take a few minutes to clear their mischievousness.
First, as I pointed out above, all the indicators leading to this report clearly show a downturn. It is as unavoidable as traffic on Lagos’ third-mainland bridge.
Second, discounting whatever number comes out as political means you’d also have to discount the rest. i.e. every other figure that came out from the NBS. Yes, that includes the ones you used during the election to make an argument for your respective candidates.
Third. There’s no third. That’s all I got.
What’s clear is that the economy isn’t doing well – at all. And the current administration needs to get on it. Our currency is still in a precarious state – even though the Central Bank says it’s all fine. Also, oil prices are lower than ever. Like a yoruba boy trying to impress his girlfriend’s father, it has ‘dobaled’ and is unlikely to get up for a while.
Everyone’s waiting for a clear direction as to the economic plans of the present administration. It might not be responsible for this mess, but it certainly will need to fix things. The administration needs to sit up and get a competent economic team in place as soon as possible. This includes restructuring present economic institutions and integrating them into a collective vision for the economy. The numbers have spoken and told us a tale. I hope the ogas at the top are listening.
Disclaimer: I consult for the Nigerian Bureau of Statistics (NBS). Yes, this might’ve just biased your view of the entire article. It shouldn’t matter, but if it does, well…c’est la vie.
Update: The numbers turned out to be worse than I expected. Far worse. The GDP figure came out to be the worst quarterly figure in the last 10 years. GDP growth rate plummeted to 2.35%.
And…let’s not forget how this all started. If you still have issues wrapping your head around how the fall in oil prices was a trigger for the mess we’re currently in, then read this.
With Oil prices at $47 per barrel and Nigeria’s oil production falling by 7% year on year, earnings from oil set to decrease – with implications for government revenue. Things are going to get rough and clearly, the government needs to step up to its economic duties.