Nigeria's economy grows 2.5% in Q2'23

Nigeria's economy expanded by 2.5 per cent in the second quarter of 2023, a slight increase from the 2.3 per cent growth in the first quarter but lower than the 3.5 per cent recorded in the same period last year. Bismarck Rewane, the CEO of Financial Derivatives, delved into the GDP figures and the recent unemployment data released by the National Bureau of Statistics during an interview on CNBC Africa. Rewane highlighted key aspects of the economic growth, pointing out that while certain sectors like agriculture saw improvement, others experienced significant contraction. The sectors that showed growth included metal ore, quarrying, rail transport, telecoms, and financial institutions, while road transportation, oil refining, coal, and crude petroleum were among the sectors that contracted the most. Notably, the crude petroleum sector has been in a recession for several quarters, raising concerns as it plays a crucial role in driving foreign exchange for the country's economy. Rewane discussed the factors contributing to this decline, such as policy changes, the removal of petroleum subsidies, and the impact on aggregate demand. He emphasized the need for new investments in the oil sector to stimulate growth. The conversation shifted to the challenges in meeting oil production quotas, with Nigeria falling short of its targets due to decreased output, particularly in land and swamp assets that are vital for revenue generation. Rewane underscored the importance of boosting investment in these areas to enhance revenue streams. The interview also touched upon the role of fiscal authorities in interpreting the GDP data. Rewane emphasized that unlocking the country's potential GDP requires increased investment, both domestic and international, along with building confidence and credibility in the economy. He highlighted the need for policy reforms, institutional changes, and restoring public trust to drive economic recovery. Reflecting on the revised unemployment figures, Rewane raised concerns about the methodology used and discrepancies in the reported employment rates. He emphasized the importance of accurately measuring employment and addressing the challenges faced by the labor force, especially the youth. The interview concluded with a discussion on the new Minister of Finance and Coordination Minister for the Economy's tasks ahead. Rewane emphasized the importance of aligning fiscal and monetary policies, restructuring debt, raising new funds, engaging with multilateral organizations, and tackling issues like vandalism in the Niger Delta region. He expressed optimism that with strategic interventions and collaborations, Nigeria could navigate its economic challenges and pave the way for sustainable growth in the future.