The National Bureau of Statistics on Monday released its final report on the performance of the economy in the 2012 fiscal year with a shocker that the country’s Gross Domestic Product declined when compared to previous years.
Specifically, the bureau said in the report that overall growth in real GDP in 2012 was 6.61 per cent, which is a decline from the 7.43 per cent recorded in 2011.
This came just as the bureau also released the Consumer Price Index for the month of January, in which it stated that inflation rate had declined from 12 per cent in December 2012 to nine per cent.
The report attributed the decline to “base effects,” which occurred as a result of higher price levels in the previous year.
This, it noted, implied that the year-on-year changes this year would not be significant.
Explaining the reasons for the higher prices in 2012, the report said, “The Nigerian economy exhibited several shocks in January 2012. The partial repeal of the Premium Motor Spirit subsidy led to increases in transportation costs as well as secondary effects, as the transportation costs affected both food and non-food prices.
“There were also the civil protests, which followed, and the man-made price gouging during the month, as merchants tried to take advantage of temporary shortages.”
The 25-page GDP report signed by the Statistician General of the Federation, Dr. Yemi Kale, also confirmed that the economy encountered numerous challenges in the 2012 period.
Some of them are oil production slowdown due to security challenges in the Niger Delta; flooding, which destroyed many farmlands in the country; and weaker consumer demand.
All these, the report stated, impacted negatively on the economy.
It said, “The Nigerian economy faced numerous challenges, which impacted overall economic activity in 2012. Declines in the real growth rates of economic activity were experienced in both the oil and non-oil sectors.
“Oil production was less than expected due to security challenges and floods, which occurred in the latter part of the year, while the non-oil sector (notably agriculture, wholesale and retail trade) was mostly affected by the floods and weaker consumer demand.
“Revised data for 2012 indicates that real GDP grew by 6.34 per cent in the first quarter and 6.39 per cent in the second quarter of 2012. The rate of economic activity was slightly higher than the initial estimates of 6.17 per cent and 6.28 per cent, respectively, as published in early 2012.
“Nevertheless, the revised growth rates were lower than those recorded in the corresponding quarters of 2011, which were 6.96 per cent and 7.50 per cent, respectively.
“Therefore, the economy declined by 0.62 percentage points and 1.11 percentage points respectively in the first two quarters of the year compared to corresponding quarters in 2011.
“For 2012, the economy is, therefore, expected to grow by 6.61 per cent, a relative decline from the 7.43 per cent recorded in 2011.”
The report said while oil production declined by 4.4 per cent to 2.37 million barrels per day during the first half of 2012 as against 2.48mbpd produced in the first half of 2011 owing to cases of theft and vandalism; the non-oil sector was affected by the incidence of flooding.
Similarly, it said infrastructure challenges hampered the manufacturing sector.
The report also gave an outlook of the economy for the next four years, stating that real GDP might rise to 6.75 per cent in 2013; 7.24 in 2014, while 2015 and 2016 might see decline to 6.93 per cent and 6.62 per cent respectively.
Inflation rate, according to the report, may moderate slightly from 11.98 per cent in 2012 to 9.76 per cent, 9.49 per cent, 9.76 and 9.95 per cent in 2013, 2014, 2015 and 2016 respectively.
It said, “This forecast appears to mirror a consistent growth pattern (when compared to previous statistics) for the Nigerian economy taking cognizance of evident realities in the macroeconomic environment in addition to the gradually improving productive base of the economy.
“Also, the continued efforts of the government towards revamping the economy through various sectoral policy reforms such as energy reforms, consolidation and post-consolidation exercises going on in the banking and sub-banking sectors, agricultural reforms and oil sector reforms are expected to drive higher growth during the period.”