Market News

By Geoff Iyatse

Managing Partner at Ecovis OUC (Chartered Accountants), Andrew Uviase, has faulted the reporting template used for the just-released gross domestic product (GDP) reporting even as he stressed that the economy has not made serious progress in real terms.

Uviase also expressed worry over the parallel growth rates of the Nigerian population (2.5 per cent) and the real GDP (2.5 per cent), emphasizing that the figure signals a stagnating economy.

He pointed to the changing age distribution of the population and the deteriorating state of infrastructure, suggesting that the present results may indicate a worrisome decline in the well-being of citizens.

“The Nigerian population growth rate is 2.5 per cent, while the GDP growth rate in real times is also 2.5 per cent. This is very worrisome, and it is a clear signal that the economy is stagnating. When the real GDP growth is compared with the changes in the age distribution of the population and the age of our decaying infrastructure, we can better imagine the level of deterioration that the present results portend for the well-being of our citizens,” he observed.

Highlighting areas of concern, Uviase underlined the decline in the real sector of agriculture and industrial sectors’ contributions to GDP, while the services sector is on the rise.

He raised questions about the overall reliability of the information presented, particularly in terms of content and mode of presentation. Nominal GDP figures for Q3 were compared with the corresponding amount in 2022, revealing a 16.08 per cent growth.

The economist expressed doubts about the accuracy of the real GDP, arguing that given the shocks and inflationary pressures experienced, the figures should be more realistic. He voiced concern about the declining contribution of real sectors, foreseeing potential consequences like increased imports of food items and finished goods.

The economist advocated for a more transparent approach to GDP reporting, suggesting that nominal and real GDP figures should be presented in the analysis for easy comparison between periods. He criticised the current practice of providing only percentage growth rates without displaying actual figures, deeming it susceptible to manipulation.

“The nominal GDP for the third quarter is N60.65 trillion as against N52.25 trillion in the third quarter of 2022. We are rightly told that the growth represents 16.08 per cent nominal GDP growth in the two periods. Our statisticians say that the real GDP in Q3 was N19.889 trillion, while the corresponding figure for 2022 was N19.294 trillion.”

“It is doubtful if the real GDP in 2023 is correct. Given the shocks and inflationary pressure that we have experienced in Q3 of 2023, the real GDP should be about half of the 19.294 trillion. I believe that the figures ought to be more realistic so that policymakers can use them properly,” he said.

Looking ahead, Uviase expressed a cautious outlook for the last quarter of the year, anticipating that economic challenges, including inflation and naira devaluation, will persist. He predicted nominal GDP growth but expected a decline in real GDP if measured accurately.

“The last quarter of the year is not expected to be significantly different from the third quarter. Economic agents are still battling with the scourge of inflation due to the fuel subsidy removal and devaluation of the naira. We also have energy costs which have skyrocketed in the current period. My prediction is that nominal GDP will grow but real GDP will decline if measured properly and realistically,” he said.