On Tuesday the 14th, the President declared a state of emergency in Borno, Yobe and Adamawa State. Geographically these states are located in the North Eastern part of Nigeria and may appear innocuous to the economic fortunes of Nigeria.
But if this Rencap prediction that it may negatively impact on the country’s GDP is correct, then we are all certainly in the loop. Now check this out;
How it affects GDP
“We see the impact on GDP growth of the state of emergency as negative but relatively small with agriculture the most likely sector to be affected but with a potential second-round effect via inflation should food prices rise significantly,” Renaissance Capital (RenCap).
Economic significance of the States
“The firm gave a breakdown of economic significance of the affected states, highlighting in brief, that the households in these three states are some of the county’s poorest with the states also having the least educated and high rates of unemployment”.
The worrying part
“Borno, Yobe and Adamawa account for 6 per cent of Nigeria’s GDP. Agricultural activity dominates as half of the collective workforce in the three states is involved in the sector. And by implication, 50 per cent of these states GDP stems from agriculture (versus national average of 40 per cent). Notably, Borno State is the country’s third biggest employer of agricultural workers (5 per cent). The three states collectively employ 10 per cent of the country’s agricultural workforce”.
In terms of population?
“In terms of population – the three states are home to 7 per cent of the country’s population. Yobe State’s per capita income of $1,206 (N190, 000) is one of the five lowest in Nigeria, by the bank’s estimates. Adamawa is not far off at $1,233 (N194, 000). Borno State’s per capita income is relatively higher, at $1,631 (N257, 000), which is equivalent to the national average, $1,700 (N267, 000).
Also 25-30 per cent of the working age population in the three states is unemployed, compared to a national average of 21 per cent in 2010. Less than 11 per cent of the population in the three states has completed primary school, compared to over 65 per cent in Lagos State. And these states also have a less than 11 per cent secondary school attendance rate, compared to an over 75 per cent attendance rate in Nigeria’s south-east states”.
Premium Times has the full and original story ==>>State of Emergency to impact negatively on GDP, inflation- Renaissance Capital