Capital importation declines by $14.31bn in 2020 — NBS

By Dele Sobowale

“GDP rises 5% YoY; declines 0.80% QoQ” — News Report

“There are three kinds of lies: lies, damned lies and statistics.” — Mark Twain, 1835-1910,  Vanguard Book of Quotations (VBQ) p130

On August 26, 2021, the National Bureau of Statistics, NBS, served fellow Nigerians its own brand of statistics. It was the truth, deliberately wrapped in deception. An actual economic set-back for the nation was cast as a positive result. That tells us volumes about the integrity of the managers of our economy. They now cannot tell the plain truth anymore.

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Two of our readers, early that evening had sent me text messages asking: 

“Have you heard the Breaking News? NBS reports the GDP grew by 5% in Q221.” That was the message from the first one. The second accused me of being a prophet of doom. 

“Shame on you, Dele Sobowale, the NBS has just reported  GDP growth for Q221. They said it grew at 5%. Didn’t you say the economy cannot grow by up to 3% under Buhari?”  

My reply was the same. “I have not seen the report. But I am certain the Nigerian economy did not grow by 5% in the second quarter of this year.”

On Friday, all the leading newspapers allowed themselves to be duped into carrying the story as summarised by the example above. What our Editors failed to realise is the fact that most Nigerians are easily misled. Most readers don’t read beyond the headlines; and most don’t know the meaning of YoY or QoQ. 

Indeed, many people went away with the impression that a dramatic change for the better had occurred. The truth was the opposite. Another disaster has befallen us; as will be disclosed shortly.

But, before proceeding, it is pertinent to express concern about the attitude of Nigerian officials serving governments performing badly. Almost without exception, they prefer to deceive Nigerians on matters that have long-term implications; from which they and their families will also suffer in the future. This report is another example of that attitude.

What a tangled web we weave when first we practice to deceive.

—Sir Walter Scott, 1771-1832, VBQ, p. 35.

What really happened in Quarter 2, 2021 in plain words? The straight and honest answer was not provided until about the eighth paragraph of the NBS report. The answer: the economy suffered another negative growth of -0.78 per cent – almost -0.8 per cent from the first quarter. So, if the readers who sent me messages want to know the truth, there it is. There was no 5% growth in Q2’21 compared to Q1’21. 

There are a few more facts which can be derived from the truth — which the NBS failed to disclose. They don’t make Buhari’s government look good. In actual fact, they should alarm all of us, NBS officials included.

First foot in door to another recession

Nigerians need to be reminded that the GDP growth for Q4’20 was 0.1 per cent; and 0.5 per cent declared for Q1’21. So, the result for Q2’21 represents a 1.3 percentage point drop from Q1 this year. By comparing Q2’21 with Q2’20, the NBS had chosen the worst quarter in our nation’s history for comparison—when the nation, like others globally, was in lock-down. 

But, we were not in lock-down in Q2’21; and the economy still recorded negative growth. Two consecutive quarterly negative growths means the economy is in recession. We are half-way into another one now. That is the second truth they are hiding from the people.

Q2’21 wipes out gains of Q4’20 and Q1’21

One does not need a doctorate in Economics to figure out the next inference from the figures available to us. With Q4’20 being 0.1 per cent, Q1’21 being 0.5 per cent,  and Q2’21 approximately -0.8 per cent, simple JSS 1 algebra should tell the reader that this setback has taken our economy back to Q3’20. That is not all. Unless the economy actually grows at 5 per cent for the second half, total year growth forecast cannot exceed 2 per cent.

That also has other implications. First, it will mean that in seven  years, the Buhari administration, which has borrowed more than all its predecessors put together,  would have managed to grow the economy by more than 2 per cent only once. 

There were two years of negative growth and three years of under-2 per cent. With the population still growing at around 3 per cent, Buhari’s promise to lift ten million Nigerians out of poverty in ten years is obviously self-delusive. Only his officials can actually believe that story now.  Nigerians  living in extreme poverty will increase by about five million when 2021 ends.

Forecast for the rest of 2021

 “Bandits Invade Zamfara  Governor’s  home town,  abduct  Over  100 Students” – News report.

Three variables will define the third and fourth quarters of this year – insecurity, agriculture and education. 

They are closely-linked and none of them is positive. Insecurity is the determining factor. Now, even Northern and All Progressives Congress, APC, governors, as well as the usually supportive Arewa Consultative Forum, ACF, have lost faith in Buhari.

 APC governors, including the governor of Katsina State, are now leading the call to Nigerians to defend themselves against bandits. Insecurity is a universal and age-long enemy of economic progress; because what people take years to build is often destroyed in one day of mayhem. “Defend yourself” is an understandable but desperate invitation to mindless destruction of lives and properties.

In our rural areas, where agriculture  is the main source of employment and productivity, able-bodied men, previously engaged in growing and harvesting food, will now be forced to take up arms in defence of their communities. Again, it requires no training in economics to know what the impact will be on food production going forward. Nobody can do two vital things at the same time.

Education in the North has received a mortal blow – setting it back more than ten years. The new school year will soon start. Schools are closed in many Northern states; and there is every reason to believe they will remain locked up for months to come. Even when they re-open,  millions of kids are not returning and new enrolments will decline. 

For the first time in Nigerian history, our young ones and their parents are being asked to choose between school and life. The choice has already been made by the vast majority of them. They will rather stay alive; and some of the parents who sold properties to rescue their children from kidnappers are not prepared to take the risk again. At any rate, some have sold virtually all they could to pay ransom.  

Consequently, the Education sector of the economy which generates about 75 per cent of its revenue in August/October every year can expect a drastic decline this year. That is a considerable variable; and nothing can prevent the collapse.  

Finally, the floods are here again ravaging vast areas of our country. Like everywhere else worldwide, our  annual floods are getting more devastating and covering wider areas than ever before. 

Meanwhile, the federal and ftates’ Ministries of Agriculture have not woken up to their collective responsibilities. They cannot understand that it is a waste of everybody’s time and effort for farmers to plant crops only for floods to wash them away.  Nobody is asking: how do we reduce the losses caused by floods?

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.