OPINION: GDP Growth, NNPC Profit and the Issue of National Cohesion by Etim Etim

OPINION: GDP Growth, NNPC Profit and the Issue of National Cohesion by Etim Etim

Editor's note: A veteran journalist based in the Federal Capital Territory, Abuja, Etim Etim, writes on the positive developments in Nigeria in the last few weeks, noting that it is refreshing news away from the security challenges the country is currently battling with.

Three important positive developments grabbed the headlines last week and gave hope to a beleaguered nation seized by constant news of bloodshed and violence. The growth of the Gross Domestic Product, GDP by 5% in the second quarter, a third consecutive climb, and the N287 billion profit posted by Nigerian National Petroleum Corporation, NNPC in the 2020 financial year, announced by President Muhammadu Buhari himself, the first time it’s ever recorded a profit in its 44-year history broke a constant stream of negative stories and astounded many analysts. Very few people saw it coming. 

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Capping the week was the uplifting speech by Vice President Yemi Osinbajo last Thursday at the National Cohesion Dialogue organized by the Africa Polling Institute, in which he noted that despite the divisive agenda of some people, Nigeria will prevail over its tribulations due to the resilience, faith, hope and strength of the citizens. 

VP Osinbajo recently predicted that Nigeria will prevail over its tribulations. Photo credit: Aso Rock Villa
Source: Facebook

The 5.01% GDP lift in Q2 is the highest quarterly growth since 2014, a significant jump from a marginal 0.51% growth in Q1. It signifies the rebound of the economy following the COVID-19-induced contractions seen in Q1 and Q2 2020. The non-oil sector is a significant contributor to the economic performance in Q2 2021 with a growth of 6.74% in real terms, the fastest growth in the sector since the third quarter of 2014. The contribution of the non-oil sector to GDP increased from 91.07% in Q2 2020 to 92.58% in Q2 2021.

The main drivers of the Q2 2021 economic growth include trade, information and communication (mainly telecommunications), transportation, electricity, agriculture (crop production), and manufacturing. The service sector, specifically, recorded its strongest performance in more than a decade, growing at 9.27%. These main growth drivers of this second-quarter performance are reflective of the gains from easing restriction of movement locally and internationally, and the improvement in the business and economic environment compared to the same period in 2020.

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Soon after the NBS made the announcement, an excited President Muhammadu Buhari was quick to commend the managers of the economy, urging them to keep at it till the positive development “touches the lives and pockets of the average Nigerian.” He had the vice president in mind, among other officials of government who have been working hard to restore the economy on the path of growth. Besides the president, Professor Osinbajo deserves a special acclamation for his hard work in coordinating the economic agenda of the administration. There is no doubt that this recovery is largely due to contributions of the National Economic Sustainability Plan (NESP) commissioned by the President and developed by a team of FG officials led by the VP. It was then endorsed by all the state governments through the National Economic Council.

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The N2.3 trillion plan, launched last year, aims to respond robustly to the negative impacts of the COVID pandemic; identify fiscal measures to grow oil and non-oil revenues for the government; create financial stimulus package for Nigerians; support for MSMEs (micro, small and medium enterprises) and support the state governments to play their own roles.

In the last six years, the VP has made a big difference in practically every important socioeconomic agenda of this administration such as the Social Investment Program (SIP), Economic Sustainability Program (ESP), Micro Small Medium Enterprises Clinics, Technology and Innovation Programs of the government. Take the ESP as an example. This program was developed last year to protect the economy against the negative fallouts of the pandemic. So far there are about half a million beneficiaries of the Payroll Support/ Survival Fund element of the plan and many other beneficiaries of the Artisan Formalization Support Track and co. In all, over 1.5million beneficiaries would be impacted.

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I should also pay tributes to other members of the Economic Sustainability Committee that worked with the VP to design the ESP. They're are finance minister Zainab Ahmed; trade & investment minister Niyi Adebayo; labour and employment minister Chris Ngige; humanitarian and disaster management minister Sadiya Farouq and petroleum minister Timipre Sylva. Others are CBN governor Godwin Emefiele; NNPC MD Mele Kyari and the permanent secretary, cabinet office, Babatunde Lawal who served as the secretary before he passed on later.

The administration has given unprecedented support to the MSMEs in the country. MSME Clinics have been held in 28 states, twice in Ebonyi, across the country including the FCT. Just last week, the vice president was in Anambra state to launch the MSMEs shared facility at the Ogbunike Leather Trading Cluster. The leather cluster has about 2,000 stores with almost 30,000 MSMEs operating there. They produce 200 to 400 pairs of shoes monthly using manual processes. But with the shared facility, the output should go up to 96,000 shoe soles, 44,000 slippers, 44,000 pairs of shoes, and 22,000 boots. This is a major support to shoe manufacturing in the company. It should be noted that under this administration, domestic leather and shoe production has received a major boost to the extent that our military and paramilitary forces are using shoes and boots manufactured in Aba and other cities in eastern Nigeria.

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Over 400,000 MSMEs have so far participated in the MSME clinics nationwide. About 300,000 new business names have been registered by the Corporate Affairs Commission (CAC) at a reduced 50% price of N5000, down from the normal N10, 000. In addition, seven one-stop shops have been established for MSMEs in Cross River, Kwara, FCT, Abia, Bauchi, Osun, and Plateau. The federal government has also launched shared facilities for MSMEs in Oyo, Bauchi, Benue, and Lagos. This is to allow MSMEs which do not possess the financial capacity to own their equipment the opportunity to go into a fully equipped cluster-style facility to pay a token to use such equipment.

In the area of technology and innovation, Professor Osinbajo has also made significant contributions. The VP’s involvement in tech brought about the following:

Microsoft opened an African Development Center in Lagos in 2019 employing engineers building Microsoft products for global use. This was as a result of the meeting the VP had with the leadership of Microsoft on the 10th of November, 2015 where Microsoft promised a significant presence on the African continent and Nigeria in particular.

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Google Inc. in July 2020 announced plans to establish its Google Launchpad Space in Lagos, the first outside the United States. Facebook, in September 2020, made public its decision to open an office in Lagos as part of its planned expansion in Sub-Saharan Africa. This should materialize this year. HUAWEI on the other hand last November promised the vice president that the company will position Nigeria as a technology centre for the African continent and give more jobs to young Nigerians. These initiatives are partly responsible for the visible roles of ICT in the GDP growth.

But it is saddening that despite these positive outlooks, a lot of Nigerians, especially those in the opposing political arena, continue to denigrate the nation and spew fake news to malign the people. For them, no news about the country is worth celebrating until there are bomb blasts, abductions, or killings. Professor Osinbajo had these in mind when he went to the Yar’Adua Center in Abuja to speak at the National Cohesion Dialogue. He wanted to instill hope and motivate those who have been depressed by a steady stream of distressing news. Describing Nigerians as "an unbreakable people,", the VP emphasized the shared interests of Nigerians across different facets of life, noting that Nigeria’s diversity can be used to drive further economic growth.

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These are inspiring words from the man who continues to present the humane face of the government. The administration should work harder to defeat the spate of insecurity that has apparently swamped out its good deeds. Then it would be difficult for anyone to deny these notable achievements of the Buhari administration.

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