Economic Recession: 7 Signs That Storm Is Almost Over For Nigeria

In the second quarter of 2016, Nigeria plunged into an economic recession.

Two quarters of consecutive negative growth was all it took.

Of course, with years of wasteful spending and impunity with corruption a nosedive was inevitable and boom! we technically recessed, then out rightly recessed. Our long years of financial rascality, from political leaders, civil servants, technocrats and business leaders had finally caught up with Africa's biggest market.

It may be early days yet, but here are 7 signs you can hold onto if you are Nigerian or doing business in Nigeria and these signs are dare say are positive

1. Latest Gross Domestic Product (GDP) figures from the very consistent and reliable National Bureau of Statistics (NBS) presents a ray of light at the end of what has been a very dark long tunnel for the average Nigerian.

The economy contracted by 0.52 percent in the preceding quarter. That means we are still in a recession but it's also sure sign it wasn't as bad as it was from the onset.We are gradually emerging stronger.

It's better to view the glass as half full than half empty at this point.

Dr Yemi Kale is Statistician General of the federation

Recall that in Q3 2016, the economy shrank by 2.34 percent.

In Q4 2016, the economy shriveled by -1.3 percent.

In Q1 2017, GDP growth stood at -0.52 percent.

Look at those figures again, they are both negative but there's been a decrease in the negative ratios.

In two or more quarters, Nigeria's economy will be back on a positive trajectory. Smart money is on that happening in Q1 2018.

Headline inflation remains at double digit, but a reduction to 16.25 percent from 18 percent is some progress.

2. Nigeria has been talking about diversifying the economy away from oil since I could call "Baa ba".

Well, maybe now, with the plunging prices of oil in the international market, it's diversify or burst for Nigeria. No more middle ground to hide.

Agricultural Exports Stats (NBS)

In Q4 2016, the manufacturing sector declined by 2.5 percent.

The manufacturing exports declined by 7 percent in Q1 2016

According to the bureau of statistics, the

Manufacturing sector grew by 1.36 percent in Q1 2017.

Manufacturing exports grew by 45 percent in Q1 2017.

Agriculture export grew by 82 percent in Q1 2017.

Raw material exports grew 25 percent in Q1 2017 over Q4 2016.

Alas! Nigeria is embracing the simple economics of diversification . Does it have a choice?.

3. Investors are gradually making a return to Nigeria, thanks to the new flexible exchange rate policy of the central bank of Nigeria.The apex bank is on the verge of conflating all forex markets by pumping more dollars into the arena.

Nigeria foreign trade stats

(NBS)

As a consequence, speculators are having a hard time and hoarders of hard currency are now out of business. The Naira has been appreciating against the Dollar in recent weeks and sustaining influx of cash by the CBN, will be key.

Bonds issued by the federal government have been oversubscribed; an indication that investors still regard the Nigerian market as a smart place to do business.

4. Thankfully, the 2017 appropriation document, otherwise known as the budget, has been passed and assented to by the legislature and executive respectively.

The N7.44T budget has an infrastructure component of N2.18T. That's some 30 percent of the total budget.

N350B has so far been released for critical infrastructure projects.

A country's economy is only as solid as its infrastructure backbone.

Foreign trade stats

(NBS)

We may be a long way off, but if the budget is duly and transparently implemented, we may well be on our way out of recession before you know it.

And that's a big IF right there.

5. The floor of the Nigeria Stock Exchange (NSE) is buzzing and bubbling again.

All Share Index (ASI) and Market Capitalization have each risen by roughly 25 per cent since the turn of the year. The ASI hit a 24-month high in the second week of June 2017.

Investors are having renewed interest in the Nigerian market, believe it or not.

6. Nigeria's crude oil production levels have been stable for a while now, thanks to a semblance of peace in the once almost ever restive Niger Delta region.

Ibe Kachikwu, Minister of State for Petroleum, Nigeria

Oil is daily being pumped out of the Forcados terminal again and disruptions to Escravos are now a trickle.Crude oil production levels are now at their highest levels in 12 months.

Oil may be a dying commodity and the talk about diversification may be on the rise but Nigeria still requires Petro-dollars to revive other ailing sectors of the economy to effectively diversify.

Yeah, we know, that really sucks.

7. Foreign exchange reserves are now in excess of US$30B. Juxtapose that with US$24B of reserves in October 2016. Nigeria may just be making gains on the economic front, however slowly.