ShareThough Nigerian economy is currently one of the fastest growing economies in the world, it should rather be growing at double -digit rates.
This was the submission of analysts at Dunn Loren Merrified, a firm that, among other things, provides first class research services to companies, sovereign and sub-sovereign markets in both domestic and international spheres, in its weekly economic update report made available to Nigerian Tribune on Friday in Lagos.
According to the report authored by Mr Tola Odukoya, their position is informed by the sustained strong performance recorded in the fourth quarter of 2011, in the non-oil sector and the potential to drive growth higher if optimised, with emphasis on agriculture and solid minerals, adding that the pace of growth by the Mongolian economy on the back of mineral deposits and agriculture further underpined their position.
“For example, the agricultural sector recorded a 5.74-per-cent growth despite its 39.5 per cent contribution to GDP. In our opinion, the pace of growth recorded by the Mongolian economy on the back of mineral deposits and agriculture underpins our position. Like Nigeria, Mongolia’s sovereign rating is ‘B1’ (or B+); however, the country has recorded significant growth in foreign direct investments as a result of policies directed at developing the minerals sector,” he said.
According to him, the latest report from Nigeria’s National Bureau of Statistics (NBS), which indicated that the Nigeria’s economy grew by 7.68 per cent in the fourth quarter to December 2011, compared to 8.6 per cent recorded in the corresponding period of 2010 now places Nigeria as third among the fastest growing economies, behind Mongolia (14.9%) and China (8.9%).
Nigeria’s non-oil sector continues to drive economic growth given the 9.07 per cent growth recorded during the period, against the 8.93-per cent recorded in the same period in 2010. Meanwhile, telecoms (36.3%) remains the critical growth driver in the non-oil sector and the broad economy supported by construction (12.1%), wholesale & retail trade (11.8%) and solid minerals (10.3%) among others. On the other hand, oil sector output contracted by 0.4 per cent within the same period.”
He, however, noted the deceleration in year-on-year real growth to 7.36 per cent against 7.98 per cent in 2010, stating that the slowdown in growth which was in line with their expectations as a deceleration of the global economy was envisaged due to the protracted debt crisis in the Euro zone.
“The slowdown in growth rate was seen across board, as only Mongolia and China grew faster than Nigeria out of the 46 countries that had released their GDP estimates as at 4Q 2011,” he said.
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Nigerian economy should be growing at double digit rate – Analysts