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HomeBusiness NewsAnalysts At FSDH Seek New Measures On Nigeria's GDP Growth

Analysts At FSDH Seek New Measures On Nigeria’s GDP Growth

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Analysts at Nigeria’s investment banking group FSDH has attributed the slow growth in the country’s real Gross Domestic Product (GDP) in the second quarter of the year to the impact of the rising uncertainties in Africa’s top economy ahead of a crucial election next year.

Nigeria posted a GDP growth rate of 1.50 percent in the second quarter of 2018, compared with 1.95 percent in the first three months of the year.
According to the research arm of the investment banking group, the growth rate of 1.50 percent recorded in the second quarter of was below the expectations of most analysts  
“The low growth and contraction across many sectors of the Nigerian economy also underscore the need for an urgent set of policies and engagements to rescue the economy,” FSDH Research said in a note to clients on Monday.
FSDH Research noted that although the fragile growth was driven by the Non-Oil sector, the fact that dominant sectors of the economy either recorded low growth or contracted in Q2 2018 indicates that urgent actions are required.
In the note, FSDH said agriculture, which is the largest sector of the Nigerian economy recorded a growth rate of 22.86 percent, representing a marginal growth of only 1.19 percent. 
According to analysts at the investment banking group, the slow growth in the Agriculture sector, if not checked, may lead to food shortage in the country and consequently escalating food prices and rising inflation rate
“The trade sector, which is the second largest sector of the Nigerian economy entered a recession in Q2 2018. The weak purchasing power in the country (occasioned by non-payment of salaries, high unemployment rate and high consumer prices) is responsible for the contraction in the Trade sector,” FSDH said.
FSDH Research observes strong growth in the Information & Communication and the Construction sectors of the economy. 
“We believe the two sectors can achieve higher growth rates given the enormous potentials inherent in these sectors.”
It then suggested that the observed contraction in the Real Estate sector can be reversed if government at all levels partners with private sector operators to provide affordable housing units for Nigerians
It said the current low GDP growth rate is not strong enough to stimulate credit creation. It has also increased the risk of doing business in Nigeria. Therefore, urgent measures are required so that low GDP growth rate does not become a new norm in Nigeria.

GDPOutlook 1

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