Nigeria’s Population Growing Faster Than Economy – Report

The Nigerian population is growing at a faster rate than the growth in the economy, Analysts at the FSDH research have revealed.
In its latest report,  the FSDH Merchant Bank said the consequence of population growth outpacing economic growth can be seen in the fast spread of poverty in the country.
“This means that the economy is not expanding in such a way that can create enough job opportunities for the unemployed population, which the National Bureau of Statistics put at 21million as at Q3 2018,” it stated.
The research note by the firm stated that the fourth quarter Gross Domestic Product (GDP) report by the National Bureau of Statistics (BNS) ahead of the presidential election was its final judgment on the performance of the Nigerian economy in 2018.
The NBS report put the rate of economic growth at the end of last year at 1.93 percent compared with 0.82 percent in the previous year

“The Nigerian economy is growing slower than the growth rate in its population, an indication of growing poverty! This means that the economy is not expanding in such a way that can create enough job opportunities for the unemployed population, which the NBS put at 21million as at Q3 2018.”
Although that was the sad reality, it added that there was a way out.
Nigeria could grow at above six percent if appropriate policies and the will power to implement the policies were in place, it added.
“If you are searching sectors of the economy to start a business or to lend money to, you should be looking at the fastest growing or largest sectors of the economy,” the FSDH stated.
These were also the sectors where policymakers could easily achieve tangible results to show the impacts of their policies on the economy.
Such sectors usually commanded government’s attention and protection, it added.
According to the FSDH report, the most influential sectors that drove performance in 2018 are: Information and communication; agriculture; manufacturing, transportation and storage, and mining and quarrying sectors.
“The five fastest growing sectors on average between Q1 2017 – Q4 2018 are electricity, gas, steam, and air conditioning supply; transportation and storage; water supply, sewage, waste management and remediation; information and communication and mining and quarrying,”
The report noted that the fragile recovery in the economy meant that additional policies which would fast-track economic activities in the country were urgently required.
This meant it would be a hard sell for the Central Bank of Nigeria (CBN) to increase key interest rates in the country in the near term.
Increase in the key interest rates like Monetary Policy Rate (MPR), Cash Reserve Requirement and Liquidity Rate may not be in view in the short-term.
Usually, an increase in the MPR, CRR and LR may help to reduce a high inflation rate and keep the foreign exchange rate stable.
However, such actions have the tendency to reduce economic growth, effectively it added.
The growing recovery in the economy, if sustained, would reduce the business risks inherent in the country, which usually scared away investors.