Financial experts have said most Nigerians have not felt the impact of the Gross Domestic Product growth recorded in the first quarter of this year because of the contraction of some key sectors and the high inflation rate in the country.
They urged the Federal Government to focus on developing key sectors of the economy in order to decelerate Nigeria’s misery index.
An investment strategist at Afrinvest, Temitope Omosuyi, in a telephone interview with our correspondent on Friday, said sectors dominated by small and medium-scale enterprises, recorded negative growth in Q1.
He said, “SMEs-dominant sectors such as transportation and storage, education, accommodation and food services, and trade sector, which account for more than 80 per cent of total employment, recorded negative performance in the reviewed period.
“As a result, most Nigerians did not feel the impact of economic recovery.”
According to Omosuyi, Nigeria’s population growth is estimated at 2.6 per cent while the economy only grew marginally by 0.5 per cent in Q1 2021.
“First, it shows that the population is rising faster than the productivity level, hence, the impact of the growth will not be felt by an average Nigerian,” he said.
He urged the Federal Government to address major drawbacks in these sectors, prioritise infrastructural development and tackle the worsening security challenges to attract foreign direct investments.
He said, “No better time than now for the government to address major drawbacks to the real sector of the economy which are largely hinged on parameters of ease of doing business.
“These factors include access to electricity, access to credit, taxes, and legal structure. In addition, infrastructure has always been a critical challenge to the real sector, but the government remained constrained in terms of resources to meet over $3tn infrastructure gaps.
“It is, therefore, very important to put in place measures to attract patient capital through foreign direct investment. FDI will not be attracted to an unsecured environment, hence, the worsening condition of insecurity in the country needs to be urgently addressed.”
An economist, Amarachukwu Nwosu, told our correspondent that impact of GDP growth would not be felt by Nigerians if high inflation persisted.
Nwosu emphasised the need for policies that would boost local economy and ensure sustainable development.
He said, “What Nigeria needs are policies that will improve healthcare infrastructure, education, manufacturing, because we can’t develop when we are importing almost everything we use in the country. Policies that are endogenous, policies that make the local economy thrive.”