GDP: Experts seek strong macroeconomic reforms to sustain growth

By Chinyere Joel-Nwokeoma
Financial experts on Thursday said growth in Gross Domestic Product (GDP) could only be sustained with stable oil price and strong macroeconomic reforms such as tax incentives.
They told the News Agency of Nigeria (NAN) in separate interviews in Lagos while reacting to the fourth quarter GDP data released by the National Bureau of Statistics (NBS).
NAN reports that data released by NBS showed that Nigeria’s GDP stood at 2.38 per cent in the fourth quarter of 2018 compared with 2.11 per cent in the third quarter.
It was the highest growth rate since the third quarter of 2015, as the non-oil sector increased further and the oil sector contracted less.
The full year 2018 real GDP growth rate stood at 1.93 per cent against 0.82 per cent posted at the end of 2017.
The country’s GDP growth was slower than government projection for the period under review; government had projected 2.0 per cent growth for 2018.
Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun said the growth would be sustained if oil price remained stable or positive.
Tella said the growth would be maintained with continuous improvement in power and transportation as well as friendly macroeconomic policies.
He explained that widening of the tax rather than increase in tax from current tax payers would sustain economic growth.
Tella, however, attributed the growth recorded in the fourth quarter to trickle effects of the passage of the 2018 budget.
“It is not surprising that the GDP improved in the last quarter of the year than earlier periods. The 2018 budget was passed quite late in the year.
“It was in the middle of the year and what we saw was that the implementation of the budget from then on started yielding fruits towards the end of the year,” he said.
According to him, the growth in agriculture output, particularly rice and some cash crops like oil palm products contributed to the growth.
“The growth in the agriculture sector and even in the economy is likely going to spill over to the 2019 as effects of late spending of 2018 budget.
“If the infrastructural development we have been seeing in the campaign and the improvement in the power sector are real, then 2019 is likely going to present a better growth rate,” Tella stated.
Also speaking, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said improvements in Q4 and 2018 full year were driven by the non-oil sector.
Omordion urged the Federal Government to be more proactive in policies and reforms to propel economic activities that would support growth.
“A change in disbursement and implementation style will go a long away to impact on the system,” he said. (NAN)