Oil, Gas, Textiles, Railways Sectors Are In Recession, Says Report
By Abimbola Abdullahi
A new report by the Centre for the Promotion of Private Enterprise (CPPE) has categorized the crude oil and gas sector, oil refining, textiles and railways as industries that are currently grappling in recession.
The report, obtained by SlyeNews also the manufacturing sector’s contribution to the nation’s Gross Domestic Product (GDP) shrunk by 1.91% in the third quarter 2022.
The report, released by the Chief Executive Officer, CPPE, Muda Yusuf, said Nigeria’s quarterly real GDP growth dipped to 2.25% in the third quarter of 2022, from 3.54% in the second quarter.
This growth decline, according to the report, reflects the diverse headwinds that have been bedeviling the Nigerian economy.
“These headwinds include: the macroeconomic instability, heightening inflationary pressures, currency depreciation, foreign exchange illiquidity, surging energy cost, weakening purchasing power, legacy structural constraints, lingering insecurity, and crippling trade facilitation issues,” it stated.
On the sectors that are in recession, CPPE said, “These are sectors that posted two consecutive quarters of negative GDP growth. They are segments of the economy that are experiencing much deeper crisis of recovery. They include: the crude oil and gas sector, oil refining, textiles and railways. These sectors are plagued by challenges of insecurity, wrong policy choices, structural impediments, plunge in productivity and corruption,”
The report identified some sectors that witnessed accelerated GDP growth to include: Agricultural sector which grew by 1.34%; Chemical and pharmaceutical, 11.09%; Iron and steel, 2.99% and Electrical and Electronics – 2.56% among others.
Sectors that recorded slower pace of growth over the last quarter performance, but whose growth rates were still in positive territory include: Cement 4.13%; Wood and wood product 2.19%, Road transportation 49.68% and Air transport 14.58% among others.
To fix the economy and address the affected sectors CPPE there ws a need to put in place reforms and intervention measures
Some of the measures recommended include: Fixing the macroeconomic headwinds of high inflation and currency volatility; Addressing the structural impediments to production and other economic activities; Reforming the foreign exchange market to inspire investors’ confidence.
Others are: Addressing the challenges of insecurity; Addressing the challenges of logistics; Taking urgent steps to tame inflation and boost purchasing power of the citizens; Accelerate the implementation of the Petroleum Industry Act.
Also recommended are: Reform the monetary policies to facilitate financial deepening in the economy; Creative support for small businesses to promote economic inclusion; Accelerating efforts to ensure domestic refining of petroleum products and Fiscal reforms which prioritize infrastructural development and transparency in the budgetary process.
