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Fg’s 7% Growth Report Questioned by AjanleKoko: 8:33am On Jul 16, 2010 |
FG’s 7% growth report questioned FRIDAY, 16 JULY 2010 01:21 BLESSING ANARO Experts say magnitude of growth is unrealistic The report by the National Bureau for Statistics (NBS) that the economy grew by 7.2 percent in the first quarter of 2010 is raising eyebrows among experts who say it is illogical for the economy to have grown by such magnitude when key components that drive the economy are looking downward. Specifically, they identify negative growth in the automobile industry where imports declined by 55 percent, house prices which have remained depressed, and little or no foreign investors trickling in, as factors that make the report unrealistic. On the contrary, NBS' stance is that the increase in crude oil production as a result of the success of Federal Government's amnesty programme added fresh impetus, and thus, growth, to the real sector. But Bismarck Rewane, renowned economist and chief executive officer of Financial Derivatives Company (FDC), insists that housing, automobile and retail sales, manufacturing output, among others, are examples of proxies used all over the world to measure the level of economic activities. "The question many have asked is how a country can record a real growth rate of 7.2 percent in the first quarter with house prices remaining depressed with analysts reckoning that it is yet to bottom out; new automobile imports declining by 55 percent in the same period, and a stuttering manufacturing output", he said in his FDC Economic Monthly for July. In his view, the plethora of national maladies makes the idea of a 7.2 percent growth startling. Rewane said institutional and infrastructural deficiencies, a struggling financial sector that has drained credit from the private sector, little or no foreign capital investments as political and policy environments remain highly volatile, all constitute major growth barriers. This volatile environment had resulted in delays to the final investment decisions on key projects by multi-nationals like Shell Nigeria, among others. Okechukwu Unegbu, former president of the Chartered Institute of Bankers of Nigeria (CIBN), said he did not perceive any form of growth in the economy during the first quarter. According to him, the rate of unemployment went up, as many people were laid off in various sectors. Unegbu noted that most industries were either shut or declined in productivity, while the capital market is yet to recover from the slump. Thomson Okoli, a manufacturer of polythene products, said he is almost closing shop because of the near collapse in public power supply. According to him, they (manufacturers) are billed specially by the Power Holding Company of Nigeria (PHCN) even after providing their own transformers and procuring special cables for connecting their factories to the national grid. Okoli, who operates in Lagos, said the agonizing part is that a particular amount is paid to PHCN whether commensurate power is supplied or not. He said many manufacturers like him, who depend on the availability of power are beginning to look elsewhere for their livelihood. He wondered what could be growing the economy. Rewane likened the kind of economic data reeled out to a situation where nothing can be more counterproductive than a doctor's medication that is premised on a distorted diagnosis. "The authenticity and reliability of government released data has been the subject of debate for a long time. For instance, there is a lot of controversy about growth, inflation and other macroeconomic figures", he said Source: Business Day http://www.businessdayonline.com/index.php?option=com_content&view=article&id=12785:fgs-7-growth-report-questioned&catid=1:latest-news&Itemid=18 |
Re: Fg’s 7% Growth Report Questioned by Parnassuss(m): 2:42pm On Jul 16, 2010 |
7% Growth, oh come thats too much a lie. Even three % i can't vouch for. |
Re: Fg’s 7% Growth Report Questioned by donugapi(m): 3:00pm On Jul 16, 2010 |
Growth ko growth ni, na -7% them mean, Must have been a typo, |
Re: Fg’s 7% Growth Report Questioned by Kobojunkie: 3:28pm On Jul 16, 2010 |
Magnitude Now questioned?? It should have been seriously looked at from the beginning. ROFLMAO!!! I have always been suspicious of those numbers, especially given the report came from the same time the banks were imploding and people were running helter skelter trying to save their money and selves. Oil production was cut by at least a quarter and not much else going on elsewhere. And the rest of the world was in recession, and investors were reportedly pulling out from Nigeria. |
Re: Fg’s 7% Growth Report Questioned by ollypass: 4:10pm On Jul 16, 2010 |
Very intresting opinions especially since some folks were defending this statistics in an earlier post.i believe kobojunkie is well acquainted with that post. so does any one have a contrary view to this? can amnesty with militants= increased oil production be the only basis for such a growth rate as the government wants us to believe? Because it is obvious economic indicators aint supporting anything near 7%. |
Re: Fg’s 7% Growth Report Questioned by ollypass: 4:24pm On Jul 16, 2010 |
www.forbes.com Still-high unemployment indicates the recession is hardly over. This should shed a little light, |
Re: Fg’s 7% Growth Report Questioned by 4Play(m): 5:40pm On Jul 16, 2010 |
I have always found a lot of our economic stats highly questionable. Even in the developed countries, measuring economic indicators is very difficult never mind Nigeria where there is an additional element of deception. |
Re: Fg’s 7% Growth Report Questioned by debosky(m): 5:56pm On Jul 16, 2010 |
When oil production dominates national income to the extent that it does in Nigeria, increase in oil production will often dwarf decreases observed in other areas. Those advocating manufacturing output, house prices and other such measures don't appear to be fully considering the overwhelming dependence of the economy on oil receipts. The examples given in the businessday report simply point to negative growth in the individual sectors mentioned - banking, manufacturing, vehicle imports, etc and not necessarily the economy as a whole. While those decreases may be valid, their contribution to the overall economic output is what will determine whether they are sufficient to counteract the increase in oil exports. Without seeing the details of the NBS' analysis, it's not clear how realistic or otherwise their assessment of growth is. |
Re: Fg’s 7% Growth Report Questioned by chamber2(m): 5:59pm On Jul 16, 2010 |
I am yet to xperience d 7% growth in my pocket.pls nairalanders am I left out here? A country dat v been in a recession since 1st october 1960 is claiming 2 b growing at 7%. Deceitful |
Re: Fg’s 7% Growth Report Questioned by Beaf: 6:03pm On Jul 16, 2010 |
olly pass: I recall the article you mentioned and being roundly flogged and abused for suggesting that every known indicator points to oil as practically the only source of FG revenue (while Abuja is practically the source of all state revenues). There were astonishingly ridiculous figures bandied about then, like agriculture accounting for 42% of our GDP. "Can amnesty with militants= increased oil production be the only basis for such a growth rate?" Thats all too visible, because every other area remains depressed. I am slowly leaning toward the belief that our economic figures are being massaged to cover up the staggering scale of fraud in the oil industry; NNPC was declared bankrupt (and by extension, Nigeria) by a talkative junior Minister. He's since been shut up, but is that what the strange economic figures are all about? Are we going to witness Earthquake level numbers mentioned in NNPC frauds in the near future? This one is worth watching! |
Re: Fg’s 7% Growth Report Questioned by canuck(m): 6:26pm On Jul 16, 2010 |
Are we talking about statistics generated by the same Federal Government of Nigeria? Those stats have always been hogwash. |
Re: Fg’s 7% Growth Report Questioned by Ibime(m): 7:23pm On Jul 16, 2010 |
debosky: Oil exports alone cannot drive Nigerias GDP up 7% in one quarter. We cant discount increased Govt spending in the first quarter nor return of foreign capital to our capital markets. . . . that is of course if the statistics are correct. |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 7:40pm On Jul 16, 2010 |
Oil exports alone cannot drive Nigerias GDP up 7% in one quarter. We cant discount increased Govt spending in the first quarter nor return of foreign capital to our capital markets. . . . that is of course if the statistics are correct. GDP is normally measured qtr on qtr. . that is Jan - march 2009 vs jan - march 2010. . . . So if we are producing nearly 1million barrels of oil more(2million bpd plus 500,000 condensate) and oil prices are were on average $85 a barrel in 1q 2010 Versus $40 in 1st Qtr 2009 and 1.5millionbpd(oil and condensate). . .then that right there is a growth of close to 50% on oil GDP alone Now oil accounts for 18% of our GDP so saying every other sector was flat,from credit crunch( which i doubt)that still pushes GDP up close to 10%. . . . Finally Total GOVT spending is up at least 50% from this period last yr(Govt spending as % of GDP is 34% in Nigeria) . . . |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 7:55pm On Jul 16, 2010 |
Magnitude Now questioned?? It should have been seriously looked at from the beginning. ROFLMAO!!! I have always been suspicious of those numbers, especially given the report came from the same time the banks were imploding and people were running helter skelter trying to save their money and selves. Oil production was cut by at least a quarter and not much else going on elsewhere. And the rest of the world was in recession, and investors were reportedly pulling out from Nigeria. U are mistaking 2009 for 2010. . . .Oil production rose rapidly to 2.1 million,plus another 500,000 barrels in condensates after amnesty(btw 0ct 2009 and march 2010) Bank crises was mostly august - dec 2009. . .by march 2010 most had stabilized and some even reported profits for Q1 2010 Most of The world exited recession in July 2009. . .matter of fact IMF estimates world growth at 4.7% this yr As for investors they came back fully at the beginning of this yr(capital market investors) NSE is up 20% yr to date |
Re: Fg’s 7% Growth Report Questioned by aktunde(m): 8:22pm On Jul 16, 2010 |
@ Chamber2 I am yet to xperience d 7% growth in my pocket.pls nairalanders am I left out here? So Nigeria started her own recession since the day she gained independence? Meaning Nigeria was better off with the Colonial Masters? |
Re: Fg’s 7% Growth Report Questioned by DisGuy: 8:40pm On Jul 16, 2010 |
Will the Chairman of NBS ever come out to defend their figures and what about NESG, or university economic group in nigeria will they ever justify the amount paid to them yearly by actually coming out with their research What do (economic) professors in Nigeria do anyway, do they ever get the chance to actually comment national economic issues as a group or make public their research |
Re: Fg’s 7% Growth Report Questioned by 4Play(m): 12:00am On Jul 17, 2010 |
It seems Debo and Paddy Lo make up their own stats where oil, 18% of GDP, is the main driver of Q1 growth. Even our Govt ''statisticians'' won't stoop so low. http://allafrica.com/stories/201006250645.html The key question is, do you believe that Nigeria's non-oil sector grew that strongly? I would like to see how this is reflected in consumption figures. 55% drop in automobile imports is pretty indicative of a marked slowdown. http://www.nigerianstat.gov.ng/ext/latest_release/GDP_Q12010.pdf |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 12:55am On Jul 17, 2010 |
It seems Debo and Paddy Lo make up their own stats where oil, 18% of GDP, is the main driver of Q1 growth. Even our Govt ''statisticians'' won't stoop so low. What are you yapping. . from the link u provide oil GDP grew at a total rate of 11.29% i.e from negative -8.08 to positive +3.21 thats a swing around of approx 11.29% so even my rough estimates are correct And Automobile imports are a tiny portion of the Nigerian economy it is just a part of the huge service sector Since they are imports and not manufactured locally,u really cant read too much into that data cause demand may have dropped for new cars(which is what the data tracks),and risen for fairly used cars. . . . |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 1:03am On Jul 17, 2010 |
@4play one more thing u have to understand is it is fairly easy to estimate GDP from money supply growth. . .and growth of Credit to the private sector with exchange rates being fairly stable,steady money supply growth will indicate to u that there is steady GDP growth From the CBN website M2(Broad money) was Approximately N11 trillion Naira as at march 2010 While at March 2009 it was at N9Trillion While Credit to the Private Sector grew from 8trillion to 10 trillion in the period(March 2009 - March 2010) Pls see CBN website below http://www.cenbank.org/rates/mnycredit.asp |
Re: Fg’s 7% Growth Report Questioned by 4Play(m): 1:17am On Jul 17, 2010 |
paddy_lo: paddy_lo: This man is a numpty. One minute, oil GDP growth(from the Paddy Lo Stats Bureau) grew a whopping 50% from Q1, the next, it's actually 3.21% growth from Q1 '09 to Q1 '10. Wasn't too difficult to actually check the stats instead of manufacturing figures from thin air. Now let's deal with the facts. From Q1 '09 to Q1 '10, non-oil GDP(81.3% of GDP) grew 8.15% whilst the 'oil GDP'(18.7% of GDP) grew 3.21%. That oil production is now growing compared to the contraction from Q1 '08 to Q1 '09 doesn't hide the fact that we are meant to believe that the non-oil sector has been experiencing robust growth. A 55% drop in imports is telling in so far as such a steep drop is usually indicative, unless due to some exceptional event(s), of a marked slowdown in economic activity. |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 1:19am On Jul 17, 2010 |
@all Nigeria should really be growing at 12 - 13%. . The structural bottlenecks inherent in our Power problems has made that impossible for now So oil and services continue to drive growth If the Power sector is reformed u will see the Manufacturing sector tick up quickly and together with backward integration help push growth rates towards 13% oer annum |
Re: Fg’s 7% Growth Report Questioned by 4Play(m): 1:27am On Jul 17, 2010 |
paddy_lo: Can you stop making a fool of yourself? If it was 'easy' to extrapolate from the growth in money supply, then Zimbabwe will be one of the fastest growing economies, if not the fastest, on the planet. Presumably, the US which has seen the steepest contraction in money supply since the 1930 over the past year has been experiencing a contraction in GDP over the same period. |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 1:28am On Jul 17, 2010 |
This man is a numpty. One minute, oil GDP growth(from the Paddy Lo Stats Bureau) grew a whopping 50% from Q1, the next, it's actually 3.21% growth from Q1 '09 to Q1 '10. Wasn't too difficult to actually check the stats instead of manufacturing figures from thin air. When u compute those oil stats u also have to take note of the dollar price i just did a rough estimate in my head anyway from 1.8million to 2.25million is a growth rate of about 25% Oil prices rising will also grow GOVT revenue by close to 50% bottom line like i told u,u cant use the stats on new car imports,since it is just a little part of our huge service economy u might as well use demand for beer,demand for hotel rooms and so on. . . I dont see anything special with new car imports,esp in Nigeria that has a thriving tokunbo informal car market After all in the USA imports have been dropping but GDP rising for the past 3 quarters |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 1:34am On Jul 17, 2010 |
Can you stop making a fool of yourself? If it was 'easy' to extrapolate from the growth in money supply, then Zimbabwe will be one of the fastest growing economies, if not the fastest, on the planet. Presumably, the US which has seen the steepest contraction in money supply since the 1930 over the past year has been experiencing a contraction in GDP over the same period. How do u think GDP is calculated/estimated with macro economic models? Listen Zimbabwe has inflation running at 5000% per annum Its exchange rate is almost 1million to 1 dollar Nigerias exchange rate has been stable for 10yrs while inflation is close to single digits and yea the contraction in USA money supply and credit growth denotes the steep contraction in GDP we saw for 4 straight quarters up till 3q 2009 Even now M2 is not growing much in the USA,while credit to the priivate sector is falling Growth is at a paltry 2.5% as only GOVT spending seems to be supporting growth. . . while the private sector retrenches Go learn econometrics before u come open your mouth. . . . |
Re: Fg’s 7% Growth Report Questioned by Ibime(m): 1:56am On Jul 17, 2010 |
Its getting hot in here. . . . All I would add is that if you get into a debate with 4Play, make sure you are coming with an arsenal of weapons! |
Re: Fg’s 7% Growth Report Questioned by 4Play(m): 1:58am On Jul 17, 2010 |
paddy_lo: Olodo, money supply tells us more about inflation/deflation pressures and is not a proxy for GDP growth as you idiotically suggested. Nigeria having a growth in money supply is not necessarily evidence that the economy is growing. and yea the contraction in USA money supply and credit growth denotes the steep contraction in GDP we saw for 4 straight quarters up till 3q 2009slowpoke, M3(broader than M2) contracted at the fastest rate since the Great Depression from January '10 to April '10, a period which has seen GDP growth. If money supply is a proxy for economic growth, the period from January to April 2010 must have seen the steepest contraction since the Great Depression. The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of insitutional money market funds fell at a 37pc rate, the sharpest drop ever. http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html |
Re: Fg’s 7% Growth Report Questioned by Beaf: 2:08am On Jul 17, 2010 |
===Takes a vantage sit, claps for 4 Play === |
Re: Fg’s 7% Growth Report Questioned by 4Play(m): 2:10am On Jul 17, 2010 |
The US is experiencing contraction in its M3 because it is facing deflationary pressures as evidenced by today's inflation report. At same time, however, GDP has been growing. Zimbabwe, and Nigeria to a far lesser extent, have growth in money supply because they're facing inflationary pressures. To claim that money supply is a proxy for GDP growth is the work of a quintessential charlatan. By Paddy Lo's figures, a 22% growth in M2 in just one year is not necessarily something to be proud of. |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 2:10am On Jul 17, 2010 |
Olodo, money supply tells us more about inflation/deflation pressures and is not a proxy for GDP growth as you idiotically suggested. Nigeria having a growth in money supply is not necessarily evidence that the economy is growing. U use M2 to estimate the size of an economy. . . .and mugu how do u have GDP growth with deflation? deflation is what the FED is fighting,so if money supply is falling sharply u inherently have deflation and zero growth so in essence u are making my point,but are too dumb to realize it slowpoke, M3(broader than M2) contracted at the fastest rate since the Great Depression from January '10 to April '10, a period which has seen GDP growth. If money supply is a proxy for economic growth, the period from January to April 2010 must have seen the steepest contraction since the Great Depression. From your own quote it tells u that the fall in M3 has meant that the USA has not been recovering properly again u make my point but cant use your head. . .the guy in your quote (Professor Tim Congdon) calls it frightening If M3 falling is of no consequence to growth,why are the authorities so concerned about it? again shrinking of money supply,whether by banks pulling credit or liquidation of assets via stock market corrections is an indication of poor,low or anemic GDP growth. . . . |
Re: Fg’s 7% Growth Report Questioned by paddylo1(m): 2:18am On Jul 17, 2010 |
The US is experiencing contraction in its M3 because it is facing deflationary pressures as evidenced by today's inflation report. At same time, however, GDP has been growing. can u please explain to us how u can have GDP growth and deflation at the same time?. . . . Deflationary pressures is a central bankers worst nightmare All asset prices go down. . .money supply shrinks,GDP shrinks It is what happened in the great depression In essence ben bernanke is printing money as fast as he can and throwing it into the economy to reflate it and grow GDP but that money is being liquidated almost as fast as he can create it. . . . Japan has just had a lost decade due to deflation. . 10yrs of no growth. . . . U must be an economic novice not to know that. . . . |
Re: Fg’s 7% Growth Report Questioned by Beaf: 2:19am On Jul 17, 2010 |
paddy_lo: To we laymen, money supply isn't about GDP, its more to do with credit availability. To economics grads like paddylo, no? |
Re: Fg’s 7% Growth Report Questioned by OAM4J: 2:25am On Jul 17, 2010 |
Beaf: well with my little economics, I also know that increase credit availability also grows the economy and the GDP. But I will listen to the experts, am loving the debate. |
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