Nigeria's GDP data: Impact on economic recovery

Nigeria's economy is showing some promising signs of recovery as the first quarter GDP rate contracted at a slower pace compared to the same period in 2016. The figures released indicate a decline of 0.52%, a significant improvement from the 1.73% decline recorded previously. Kayode Akindele, a Partner at TIA Capital, shared insights on the implications of these numbers and their potential impact on the country's economic landscape. Akindele expressed optimism about the slowing down of the slowdown, hinting at a possible exit from recession in the coming quarters. He highlighted the importance of forecasters' projections for the next quarter, suggesting a potential return to positive GDP growth, especially in the oil sector, which has been a key driver of the country's economic performance. The non-oil GDP also saw improvement, with a growth rate of 0.27% compared to 0.18% in 2016. Akindele attributed this progress to the effects of foreign exchange policies that have facilitated access to currency for key sectors like manufacturing and agriculture. Despite some positive developments, challenges remain for the manufacturing sector, particularly in terms of power supply and inflationary pressures. The recent NPC decision to maintain high lending rates was met with skepticism by Akindele, who highlighted the need for more support for the private sector to promote sustainable economic growth. Overall, the latest GDP figures are expected to bolster investor confidence and potentially lead to a more positive market outlook, especially with the recent improvements in the FX market. While cautious optimism prevails, uncertainties persist, particularly in addressing the lingering issues faced by the manufacturing sector.