Buhari urged to address rapidly declining GDP

Economist expert Muda Yusuf has emphasised the need for reforms and interventions to address some sectors of the economy with declining and contracting gross domestic product (GDP) figures in the third quarter of the year.

Mr Yusuf said this in a statement on Sunday in reaction to the Nigerian quarterly real GDP growth, which dipped to 2.25 per cent in the third quarter.

The economist noted that the decline from 3.54 per cent in the second quarter reflected the diverse headwinds bedevilling Nigeria’s economy.

The headwinds included macroeconomic instability, heightening inflationary pressures, currency depreciation, foreign exchange illiquidity and surging energy cost, Mr Yusuf pointed out. Others were weakening purchasing power, legacy structural constraints, lingering insecurity, and crippling trade facilitation issues.

The economists stated that the striking contraction of the manufacturing sector by 1.91 per cent and the slump in the food and beverage sector, which contracted by 4.05 per cent, was alarming.

“This is the first contraction of the sector since the recession of the second quarter of 2020. The food and beverage sector is the flagship of the Nigerian manufacturing sector, and for several decades, it was the toast of investors in the stock market,” Mr Yusuf explained. “The sector contributed N2.2 trillion to GDP in the third quarter. This development is a reflection of a major setback for the Nigerian manufacturing sector, which calls for an emergency response by the government.”

The expert, founder of the Centre for the Promotion of Private Enterprises (CPPE), recommended fixing the macroeconomic headwinds of high inflation and currency volatility to spur GDP growth.

He also stressed the need to address the structural impediments to production and other economic activities and reform the foreign exchange market to inspire investors’ confidence.

“Nigeria must accelerate the implementation of the Petroleum Industry Act and efforts to ensure domestic refining of petroleum products. There must be creative support for small businesses to promote economic inclusion and reform the monetary policies to facilitate financial deepening in the economy,” said Mr Yusuf. “The country also needs fiscal reforms which prioritise infrastructural development and transparency in the budgetary process.” 

(NAN)