By Peter Osalor
A RECESSION is when the economy declines significantly for at least six months. That means there’s a drop in the following five economic indicators: real GDP, Income, Employment, Manufacturing, and retail sales. People often say a recession is when the GDP growth rate is negative for two consecutive quarters or more.
Nigeria’s economic situation is in “its worst possible time”, according to Finance Minister Kemi Adeosun. The inflation rate shrank at 17.1%, The GDP had contracted by 2.06%, the economy by 0.36%.
The national Bureau of Statistics (NBS) has released a report on Nigeria’s economy in the second quarter, including the Gross Domestic product (GDP), Inflation, Employment, and Unemployment, Capital Importation and other key fundamentals.
Oil price has crashed to less than $50 per barrel; Nigeria’s production output has tumbled over 400,000 barrels due to militancy activities in Niger Delta region. Oil production plummeted to 1.69 million barrels per day in the second quarter of 2016, down from 2.11 million barrel per day in the first quarter, with oil – based GDP contracting by 17.5% in quarter two compared to 1.9% in the first quarter.
Naira remained at record low of #423 per dollar in the black market, as dollar exchange for 365.25 in the interbank market this month.
On Employment; 4.58 million Nigerians have become jobless since last year, adding 2.6 million to unemployment figures of 1.46 million recorded in the third quarter of 2015 and 518.102 in the fourth quarter of 2015.
According to reports during the reference period, the unemployed in the labour force increased by 1,158,700 persons, resulting in an increase in the national unemployment rate to 13.3% in Q2 2016 from 12.1 in 2016, 10.4% in 2015 from 9.9% in Q3 2015 and from 8.2% in Q2 2015.
The value of capital imported into Nigeria in the second quarter of 2016 was estimated to be $647.1 million, which represents a fall of 75.73% relative to the second quarter 2015.
This provision figure would be the lowest level of capital imported into Economy on record, and would also represent the largest year on year decrease. This would be the second consecutive quarter in which these records have been set.
The way out of this Recession is Entrepreneurial Revolution. Entrepreneurial revolution is the way out that will take us to our promise land. I am strongly crying for this revolution and have written a book on it “Entrepreneurial Revolution”. It is no longer news, the country is broke, and oil prices have gone down to an all – time low of less than $50 per barrel.
We didn’t save when we had excess, we didn’t build infrastructures. Not enough power to drive the industries. These are tough times but provide the opportunity to learn and build. For Nigeria to be great again we need to take tough decisions. Entrepreneurship needs to take the front burner.
With about 70% youth population (Approximately 80 million) there is an abundance of human resources. We need to create jobs for the growing population of youths. But it is not all for government to create jobs for the growing population of youths. Government has responsibility to create right environment for entrepreneurial development.
However, there are numerous challenges hindering the growth of entrepreneurship in Nigeria, they are: Lack of access to fund; over taxation of SMEs; insufficient power; lack of critical infrastructures; insecurity.
Recommendation: The practical ways government can create the right environment for business to thrive are: eliminate multiple taxations of SMEs; encourage public – private partnership; engage the entrepreneurs in policy formulation; provide critical infrastructures needed for SMEs; improve power supply and provide adequate security.