The Nigerian economy recorded a surge in 2021 after the fall it experienced in 2020.
This saw the GDP having consecutive positive growth in all three quarters of 2021; 0.51%, 5.01%, and 4.03%.
Likewise, the year saw inflation rates declining for eight months, from March to November although an increase was recorded in December.
These economic indicators show improvement from a Covid-ravished economy. However, economic realities and the statistics don’t align and it appears Nigeria is still struggling from the impact of coronavirus. Socio-economic statistics are improving but socio-economic realities are moving in the opposite direction.
After the economic crisis experienced in 2020, the economy gradually picked up steam as it raised its nose over the abyss it fell into. This was pioneered by increased government spending as the GDP surged up in 2021 to positive figures and it is projected that the economy will grow by 4.2% in 2022.
The inflation rate in 2021 started on a high note at 16.47%, increasing to 18.17% in March. After that, there was a steady decline in the inflation rate for eight months ending in November at 15.4%. It, however, picked up in December, closing the year at 15.63%.
On the flip side where economic realities lay, Dataphyte’s research showed how food prices rose. Official data shows how nominal prices of food items continue to increase while inflation rates decline.
The pandemic affected many enterprises, which led to their closure and the laying off of employees. By the end of 2020, the country recorded an all-time high in unemployment rates. The country’s unemployment rate increased from 27.11% in the second quarter of 2020 to 33.28% by the end of the year. The country started the year with an unemployment rate of 33.28%. The situation has pushed many into poverty. Nigeria moved from having 0.1% of its population going into poverty every second in 2020 to 3.3% in 2021.
The country’s population that is living below the poverty line moved from 39% in 2020 to 41% in 2021. Moreso, it is expected that this will continue to increase, pushing 11 million more people into poverty in 2022.
Although the country’s GDP shows remarkable economic progress attributed to increased spending on goods and services, it has limitations such as not taking into account some economic statistics. The GDP does not reflect the living standards of the people and the income inequality inherent in the economy. There have been arguments that GDP should not be the sole determinant of economic assessments and policies for its failure to capture significant aspects of a country’s realities.
So yes, socio economic data shows that Nigeria is progressing and recovering from the devastation of the coronavirus pandemic, but that is not what Nigerians are experiencing and data on unemployment and people living below the poverty line agree with the people’s experiences. There is a need for purposeful reforms and policies to bridge the gap and ensure balanced economic performance.