The National Bureau of Statistics (NBS) on Monday, August 26, Nigeria’s Gross Domestic Product (GDP) grew by 3.19% in the second quarter of 2024 (Q2 2024).
Its document titled “Nigeria Gross Domestic Product Q2 2024,” made this disclosure.
The document said: “Nigeria’s Gross Domestic Product (GDP) grew by 3.19% (year-on-year) in real terms in the second quarter of 2024.”
NBS said the growth rate is higher than the 2.51% recorded in the second quarter of 2023 and higher than the first quarter of 2024 growth of 2.98%.
It also said the performance of the GDP in the second quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 3.79% and contributed 58.76% to the aggregate GDP.
NBS said the agriculture sector grew by 1.41%, from the growth of 1.50% recorded in the second quarter of 2023.
The growth of the industry sector, said the NBS, was 3.53%, an improvement from -1.94% recorded in the second quarter of 2023.
The report said: “In terms of share of the GDP, the industry and services sectors contributed more to the aggregate GDP in the second quarter of 2024 compared to the corresponding quarter of 2023.
“In the quarter under review, aggregate GDP at basic price stood at N60,930,000.58 million in nominal terms.
“This performance is higher when compared to the second quarter of 2023 which recorded an aggregate GDP of N52,103,927.13 million, indicating a year-on-year nominal growth of 16.94%.
“For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors.”
This was contained in its document titled: “National Gross Domestic Product Q1 2024.”
The document also said the growth rate is higher than the 2.31% recorded in the first quarter of 2023 and lower than the fourth quarter of 2023 growth of 3.46%.
NBS said: “Nigeria’s Gross Domestic Product (GDP) grew by 2.98% (year-on-year) in real terms in the first quarter of 2024.
“This growth rate is higher than the 2.31% recorded in the first quarter of 2023 and lower than the fourth quarter of 2023 growth of 3.46%.”
The report said the performance of the GDP in the first quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 4.32% and contributed 58.04% to the aggregate GDP.
It said the agriculture sector grew by 0.18%, from the growth of -0.90% recorded in the first quarter of 2023.
The growth of the industry sector, said NBS, was 2.19%, an improvement from 0.31% recorded in the first quarter of 2023.
The Bureau said, in terms of share of the GDP, the services sector contributed more to the aggregate GDP in the first quarter of 2024 compared to the corresponding quarter of 2023.
The federal government said it plans to move the Gross Domestic Products (GDP) from the current 15 per cent to 25 per cent between the next two and four years.
Speaking at the Nigeria Employers’ Consultative Association (NECA) 62nd Annual General Meeting (AGM) in Lagos, Vice President Prof Yemi Osinbajo said this will be achieved through the various economic policies put together by the government.
He said government will intensify efforts on the implementation of the Economic Growth and Recovery Plan.
Represented by Former Special Adviser to the President on Economic Recovery, Mr Yomi Dipeolu, the Vice President said: “On efforts made so far to reinvigorate the economy, include several economic and fiscal policies, which included rebuilding fiscal buffer, enhancing Forex reserve, improving the ease of doing business and focusing on import substitution, had been undertaken by the present administration.”
The Second Vice President of NECA, Mr Mauricio Alarcon, in his address said challenges of operational hiccups experienced at the port remained one year after the Presidential Executive Order to promote transparency and efficiency. He called for urgent infrastructural development at the Lagos Port as the country has lost about N6 trillion across different sectors due to the Apapa gridlock.
”Survey by the OPS showed that Nigeria lost about N3.06 trillion on non-oil export and about N2.5 trillion earnings annually across the different sectors due to the Apapa gridlock,” Alarcon said.
He said the now that the general election was over; the government should look at reforms that would significantly impact on the economy.
”There is need to fast-track infrastructural development at the Lagos Port, diversification programme, a market driven foreign exchange management, sustain and significant reduction in the cost of governance.
“Government should also fast-track the passage of Petroleum Industry Governance Bill, a market driven electricity supply and billing system,” he said.
Multinational professional services firm PricewaterhouseCoopers (PwC) Nigeria Limited has estimated that corruption could cost up to 67 per cent of Nigeria’s Gross Domestic Product (GDP) by 2030, if unchecked.
The Nigerian report of PwC’s 2018 Family Business Survey launched on Monday in Lagos said corruption was associated with lower investment, higher prices as well as barriers of entry for businesses.
The result of the survey, which was made available to The Nation, said corruption was one of the top three challenges cited by Nigerian family businesses as militating their personal and business goals.
Others are economic environment (70 per cent) and regulation (57 per cent).
The Family Business Survey is a global market survey among key decision makers in family businesses within a number of PwC’s key territories. The goal of the survey was to get an understanding of what family businesses are thinking on the key issues of the day.
This year’s report with the theme, “Building a Lasting Competitive Advantage Through your Values and Purpose in a Digital Age” saw family business leaders globally reporting robust health, with levels of growth at their highest since 2007.
The survey said regionally, businesses in the Middle East and Africa were the most optimistic, with 28 per cent expecting aggressive growth.
They are followed by those in Asia Pacific (24 per cent), Eastern Europe (17 per cent), North America (16 per cent), Central/South America (12 per cent) and Western Europe (11 per cent).
It, however, said growth among Nigerian family businesses over the last 12 months was lower than the global average, with only 53 per cent reporting growth in the last 12 months against 69 per cent globally.
However, 87 per cent expect to grow over the next two years with 40 per cent saying growth will be quick and aggressive against 16 per cent globally.
NIGERIA’S Gross Domestic Product (GDP) growth rate increased by 2.38 per cent (year-on- year) in the fourth quarter of 2018 (Q4, 2018), according to the National Bureau of Statistics (NBS).
The growth rate indicates a 0.55 percentage rise compared to the 1.81 per cent growth recorded in the preceding quarter.
It also represented an increase of 0.27 per cent when compared to the 2.11 per cent growth rate posted in the fourth quarter of 2017.
According to the Nigerian Gross Domestic Product Report for the fourth quarter and full year 2018, released yesterday by the NBS, on a quarter on quarter basis, real GDP growth was 5.31 per cent.
“The fourth quarter growth performance implies that real GDP grew at an annual growth rate of 1.93 per cent in 2018, compared to 0.82 per cent recorded in 2017, an increase of 1.09 per cent points,” the NBS said.
In Q4, aggregate nominal GDP stood at N35.23 trillion, higher than N31.27 trillion recorded in Q4, 2017, representing a nominal growth rate of 12.65 per cent. The report also indicated that the real GDP growth stood at N19.04 trillion.
However, nominal GDP for the whole of 2018 stood at N127. 76 trillion, representing a nominal growth rate of 12.36 per cent when compared to N113.71 trillion in 2017.
Average daily oil production stood at 1.91 million barrels per day (mbpd), lower than the 1.94 mbpd in Q3 2018 as well as 1.95 mbpd recorded in Q4,2017.
The oil sector contributed 7.06 per cent to real GDP in Q4, down from 9.38 per cent in Q3 and 7.35 per cent in Q4,2017.
The NBS noted that for 2018, the contribution of the oil sector to aggregate real GDP was 8.60 per cent, compared to 8.67 per cent in 2017.
On the other hand, the non-oil sector contributed 92.94 per cent to real GDP in Q4, 2018, slightly higher than the 92.65 per cent recorded in Q4 2017.
The non-oil sector grew by 2.70 per cent in real terms within the review period. This is 1.25 per cent higher than the growth rate recorded in Q4 2017, and 0.38 per cent higher than the growth rate recorded in Q3 2018.
On an annual basis, the non-oil sector recorded a growth rate of 2 per cent in 2018, performing considerably better than 0.47 per cent in 2017.
For 2018, annual contribution of the non-oil sector was 91.40 per cent compared to 91.33 per cent in 2017.
A breakdown of the sectoral contribution to growth showed that agriculture contributed 26.15 per cent to overall GDP in real terms in Q4, compared to 29.25 per cent in the preceding quarter but slightly higher than the 26.13 per cent recorded in Q4, 2017.
Statistician-General of the Federation and the Chief Executive Officer of the National Bureau of Statistics, Dr. Yemi Kale, has said tourism in Nigeria contributes 34 per cent of the nation’s Gross Domestic Product (GDP).
Kale said this in his address at the recently concluded 61th United Nations World Tourism Organisation, Commission for Africa (UNWTO-CAF) meeting that was held last week in Abuja.
The Statistician-General said: “With respect to the direct impact of tourism on the GDP, the economic activities that make up what we may call the tourism characteristic sectors, including art, entertainment and recreation, trade, transport, accommodation and food services, administrative, support and other services account for 34 per cent of the GDP in 2017 and about 20 per cent of employment even though as you know not all of that 34 per cent and 20 per cent GDP and employment contribution will be related directly to tourism activities.
“Nevertheless, this shows you the immense potential of tourism activities in Nigeria, a $500 bn economy with about 70 per cent of that household consumption expenditure.
“For households, particularly within rural regions, tourism can also prove to be a much-needed source of additional income. Indeed, the tourism sector encompasses and affects several sub-sectors across the nation’s key output sectors.
“Apart from these economic benefits that I have briefly mentioned, tourism activities also reinforce cultural pride, the preservation of our unique heritage and traditions, as well as the conservation of our environment. It is perhaps because of this far-reaching impact on all groups of society, that tourism is mentioned specifically within both the Sustainable Development Goals and the wider Agenda 2030.”
Kale noted that the recent economic downturn in the nation’s economy had a negative impact on both domestic and international travel last year.
His words: “The recent economic downturn presented a challenging time for tourism in Nigeria. As you know, leisure travel relies on people having discretionary income, and with many of our key markets feeling the effects of the economic recession and with household expenditure budgets squeezed, it has affected the growth in tourism characteristic sectors. For example, annual total numbers of domestic and international air passengers declined by -8.40 per cent and -7.13 per cent in 2017 respectively compared with the previous year
”The recent economic conditions have, therefore, had a negative impact on local tourism operators. Operators have had to make hard decisions about how to position their business to ride out the storm. But I have been amazed to see just how resilient tourism related economic activities are in Nigeria.
“Arts, entertainment and recreation and administrative support and other services activities, for example, were among the few activities that were able to keep growing for most of the recession period. Other recent data I have received shows that many tourism related activities have made necessary adjustments to weather out these difficult times.”
The Statistician-General harped on the need for tourism statistics as it is a tool in tracking development goals, measuring progress, and improving the efficacy of policy interventions. Tourism statistics, he said, is critical in providing the sector with the best foundation to base its decisions on and commended the UNWTO for spearheading the mandate to develop a robust tourism data framework, the measuring sustainable tourism framework which moves beyond tourism statistics as just an economic tool to a holistic approach which considers the social and environmental impacts as well.
He itemized some the challenges of producing tourism statistics in Nigeria which include: the high level of informality of the tourism characteristic activities with about 60 per cent of them informal in nature; the poor attitude towards record keeping; inadequate funding and weak coordination among tourism statistics related agencies and business.
The International Fund for Agricultural Development (IFAD)-assisted Value Chain Development Programme (VCDP) contributed 56 million dollars into Nigeria’s Gross Domestic Product in the 2017 production season.
IFAD Nigeria Country Programme Officer Dr Ben Odoemena, said this yesterday in Abuja at the mid-term review of the programme.
Odoemena explained that 9.2 million dollars of the money was injected into Benue through the IFAD programme beneficiaries, thereby saving the country the foreign exchange that would have been expended on rice importation.
The officer said 15,000 tonnes of paddy rice were produced while 10,000 jobs were created during the period under review.
‘‘In Benue alone, more than 3,000 jobs were created and overall, 10,000 jobs have been created, comprising paid jobs of more than 7,000. ‘This laudable goal was achieved due to the political will of the participating state governments and this has gone a long way to boost rice and cassava production in the country,’’ he said.
He stressed that aside supporting farmers, the programme had resulted in the construction of feeder roads to enable farmers to access their rice and cassava farms.
He said the programme also constructed modern rice mills in states to enhance its quality.
Odoemena said more attention was now being focused on meeting the food needs of the country as well as earning more foreign exchange from exports and to diversify the nation’s economy.
Also speaking, Dr. Ameh Onoja, the National Coordinator, described the programme as a success story because it had empowered so many youths going by the assessment.
He said 45,000 farmers in the six participating states of Anambra, Benue, Ebonyi, Niger, Ogun and Taraba had in the last three years embraced rice and cassava farming.
Of that number, some of them engaged processing and marketing, to develop sustainable Value Chains for the two commodities.
Onoja noted that in the last three years, the rice producing areas were producing over five tonnes of rice per hectare as against two two tonnes previously while cassava yield had hit an average of 20 tonnes per hectare as against the 10 tonnes recorded in the past.
“It is indeed a success story as we have also constructed 130 kms of roads out of our target of 180 kms. We have also upgraded processing centres and farmers there are doing stone-free branded rice with better equipment and have increased the income of the processors,’’ he said.
It is interesting to think of Nigeria as an overweight giant with unkempt beards irregularly scattered all over his face (at least we like to pride ourselves as THE GIANT OF AFRICA). Even an overweight giant becomes a burden to itself.
Giant of Africa?
His excessively rotund and roly-poly body is as a result of the over-consumption and excessive reliance on a particular kind of food nutrient.
He likes to drink oil and smoke gas.
Quite frankly, no human species can survive or thrive with that kind of dietary equation; in fact, such a one is a disaster waiting to happen.
After the discovery of fossil oil at Oloibiri area of Bayelsa in 1956 in commercial quantity, petroleum industry in Nigeria became the largest industry.
Oloibiri
Oil, therefore, supplied approximately 90 percent of foreign exchange earnings and about 80 percent of federal revenue and contributes to the growth rate of Gross Domestic Product (GDP) of our economy.
The oil boom of 1970s made Nigeria rely heavily on crude oil and natural gas for its continuous supply of economic diet. Crude oil has since then become the darling of our nation; she received preferential treatment to the detriment of our first love (Agriculture).
Eventually, agriculture which in times past earned us at least 70% of our foreign exchange deteriorated very fast because our policy wonks became derelict in their sacred obligations to her (Agriculture).
Today, the salubrious broth called crude oil has started to turn sour and rendered our taste buds sore. Significant precincts of oil-rich regions are no longer habitable due to oil spillage.
The persistent groundswells of legitimate agitations and destructive activities by militants in the Niger Delta have almost crippled the economic wheels of our dear country.
The bludgeoning and bloodying of our nation’s “economic head” by corrupt practices and sleazes in the public and private sectors are all a part of the curses and crosses emanating from our overreliance on crude oil.
It is shameful that we still grovel at the feet of crude oil when countries on the global pedestal have begun to embrace and deliberately fade out their reliance on it by cannibalizing and diversifying other sectors.
Thespians in the crude oil intoxication Melodrama
The thespians
Our ludicrous fixation on oil further deepened as we now have a President in the person of Muhammadu Buhari, who shuttles between his primary role as the chief executive helmsman of the Federal Republic of Nigeria and the substantive Minister of Petroleum.
However, when we thought that we have heard and seen the last of the behavioural debauchery that took place in past administrations from crude oil intoxication, the recent wrangling between the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti K. Baru regarding the alleged awarding of contracts without due consultation with the minister betrayed our gullible optimism.
The melodrama became even messier when the Vice President, Prof. Yemi Osinbajo debunked widespread statements that he approved the said sum as the Acting President during the period Muhammadu Buhari was on his medical vacation. Regardless of who is right or wrong, the obvious solution is a total overhaul and sanitation of the inherent tacky climate in the oil sector.
Sad yet is the fact that the President’s Chief of Staff, Abba Kyari is a member of the Board of Directors of the NNPC, according to legal experts, this is wrong in its totality. Unfortunately, this and much more have been handled like nothing is happening.
If truly our President intends to be involved personally, operationally and officially in the development of the Nigerian project, then he should hands-off the oil ministry as its head, and get a hands-on on some ministries like Agriculture, Health and Education – all of which are in dare need of a state of emergency.
If Nigeria perpetuates in this state of plateau; posturing itself as the biblical “fig tree”, it might eventually fall like the proverbial humpty dumpty for overreliance on oil “blocks”.
While the world is running, jumping and jetting into the future with precise plans and ground-breaking innovations in Science, Technology, Medicine, Agriculture, Art etc., Nigeria is busy performing the “moon walk” and sliding backward very fast into antiquity.
It is heartbreaking that our country is still unnecessarily dependent on fossil deposits that have become more or less a curse and an albatross to us as a nation instead of a great vault of opportunities to all and sundry.
Death and burial of crude oil
A Resident fetching Crude Oil from leakage at Adibawa Well 8 in Edagberi Community in Rivers State.
It is instructive to note that countries like Norway, India and France have decided to stop the exploration and production of crude oil by year 2025, 2030 and 2040 respectively in order to combat the deleterious and hazardous effects of climate change.
There seems to be a growing movement by these countries to force the extinction of vehicles that run on fossil fuels. They have resorted to the production of electric cars and the complete obliteration of petrol and diesel-driven engines.
Volvo Cars became the first mainstream automaker to sound the death knell of the internal combustion engine, saying that all the models it introduces starting in 2019 will be either hybrids or powered solely by batteries.
Their goal is to drive a sharp stake through the heart of carbon emissions; the boogeyman whose corollary effects manifests as global warming, depletion of the ozone layer and its other destructive appurtenances.
European countries like England, France, Norway, Denmark, the Netherlands, and Germany are making definitive moves away from the use of fossil fuels. They have completed plans to announce the death and burial of the era of fossil domination.
Big car manufacturers like Tesla, Volvo, Renault and the PSA Group are beginning to embrace alternative sources of powering cars through electric, solar and battery.
The repugnant smell of doom and gloom
On a macro scale, what are the economic implications of these decisions by some of the stakeholders and key players (countries and car companies) in the crude oil space on the African continent, heck!…on Nigeria? What will be its effect on our social, political and cultural survival?
Before reaching any hasty conclusions, it is important that we understand the sundry contributions of the oil sector to our nation.
Also, how bright will the future earnings of Nigeria be? Nigeria being a member of The Organization of the Petroleum Exporting Countries (OPEC) and the second largest producer of oil in Africa?
Your guess is almost as good as the writer’s.
We would definitely hit a slide due to the sudden drop in the demand for our crude oil.
In retrospect, when the price of oil fell from highs of about $112 a barrel in 2014 to below $50 in 2016, Nigeria was thrown into recession. It is, therefore, better imagined what will happen to Nigeria if European and Asian countries completely deviate from fossil fuel dependence to other healthy alternatives like electricity and solar, knowing fully well that Crude oil sales account for 70% of government income.
Although government have had tiny sparks of successes in several non-oil sectors like agriculture, however, it seems all we can boast of at best are “tiny sparks” because of poor storage, haulage and management of agricultural produce, which is gradually becoming an embarrassment to our nation especially with the outright rejection of our export agricultural produce in Europe, United States and other parts of the world in recent times. What a shame! We can do better in Agriculture only if we set our minds, hearts and hands to it.
Salvation in the Non-Oil sector?
There is a portion of one of the Holy Books that says: “At least there is hope for a tree: If it is cut down, it will sprout again, and its new shoots will not fail…. at the scent of water it will bud and sprout again like a new seedling.”
There’s hope
Last month, the National Bureau of Statistics (NBS) unveiled the bright figure of 0.55% GDP Growth in the second quarter (Q2) of 2017; this indicated that we are “statistically” out of recession. This momentous declaration by the bureau was a joyous daybreak to millions of Nigerians who had been seared in the flames of poverty and encumbered by the manacles of economic hardship.
However, for us to avoid our “joyous daybreak” reversing into long nights of starvation, those at the helms of affairs of our great country need to latch upon and capitalize on the non-oil sector to bring to us the dividends of democracy.
Below are a few statistics from the NBS:
According to the preliminary results for the second quarter of the year 2017, Nigeria’s economic recovery was driven principally by the performance of four main economic activities comprising Oil and Non-oil (agriculture, manufacturing and trade).
The results showed that Oil GDP recovered significantly from -11.63 per cent in Q2 2016 and -15.40 per cent in Q1 2017 to 1.64 per cent in Q2 2017.
While Oil GDP expanded considerably in the second quarter of 2017, Non-oil GDP only grew at 0.45 per cent, down from 0.72 per cent in the preceding quarter and -0.38 in the corresponding period in 2016.
Agriculture continued its strong and positive growth, which it had maintained throughout the recession, growing by 3.01 per cent in Q2 2017, from 3.39 per cent in Q1 2017 and 4.53 per cent in Q2 2016.
Manufacturing retained its positive growth for the second consecutive quarter in Q2 2017, growing at 0.64 per cent compared to 1.36 per cent in Q1 2017 and -3.36 per cent in Q2 2016.
Trade which has a dominant share of GDP remained negative at -1.62 per cent, but the contraction in the sector decelerated from the -3.08 per cent recorded in Q1 2017.
The results also showed that the industry sector grew positively by 1.45 per cent in Q2 2017, after nine consecutive quarters of negative growth since Q4 2014.
Service = 53.73%
Industries = 23.31%
Agriculture = 22.97%
Does it look like Nigeria’s economic future is bright? Yes! Can we begin to pop Champagne and take a little rest? Absolutely NOT!
Although the oil and gas sector accounts for about 35 per cent of gross domestic product, and petroleum exports revenue represents over 90 per cent of total exports revenue, Agriculture is expected to feature as one of the pertinent driving force in Africa’s economic rebirth and is already ranked among the critical factors contributing towards an increasing curiousity in the continent’s native resources.
It is estimated that over 60 percent of the world’s available and untapped farmland is in sub-Saharan Africa. Interestingly, for Nigeria, agriculture contributes about 22 percent of its GDP.
With the allocation of N92 Billion to the Agriculture sector, and the ubiquitous potentials in other sectors like tourism, entertainment, art and culture, manufacturing, trade and other non-oil sectors of the economy, the government might be able to improve the economic aesthetics of Nigeria.
A few Recommendations
We need to consciously divest our reliance on the oil sector and begin to focus on other non-oil sectors; especially those that are currently driving world economies. For example, in Asia, technology drives the wheel of their economy; in Europe, agriculture does it for them; even as they expand and bolster their technological strength.
Our leaders need to be selfless and sincere in the making of policies that are people-centred and not one to fuel their political and personal agendas.
Also, our Presidents need to eschew the ideologies of heading the oil sectors alongside their executive portfolios. This appears like they have ulterior motives.
Citizens should use the power of their votes to elect fresh and credible individuals with concrete antecedents of leadership and accomplishments. These should be individuals who can clearly enunciate their plans and can galvanise the people towards the achievement of these plans.
We need to invest more in tapping the resources between our ears and not those beneath the ground. In Asia, there are technological schools whose certifications are as valid as those of the universities; making it a viable alternative for everyone to have access to education. The never-ending battle between the B.Sc and the HND is a mere case of “potayto…potahto”; just mere nomenclature. We need to place more premiums on competence instead of certificates.
Moreover, the clamour for true federalism, especially when it bothers on resource control and decentralisation should be placed in the front burner. This will make states more competitive and accountable to their people.
These recommendations (though not exhaustive) are some of the immediate approaches we can engage to move the economic and political wheels of our country.
Nigeria’s Gross Domestic Product (GDP) contracted by -0.52 per cent (year-on-year) in real terms in the first quarter of 2017, a report by the National Bureau of Statistics (NBS), has indicated.
The NBS report, tagged, ‘Nigerian Gross Domestic Product Report for first quarter 2017’ released yesterday in Abuja, according to the NBS, represented the fifth consecutive quarter of contraction since the first quarter of 2016.
Meanwhile, the Presidency yesterday assured that there were strong indications that Nigeria was gradually exiting economic recession.
The Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu gave the indication in a statement while releasing the 2017 Q1 gross domestic product (GDP) figures.
According to him, there was a turnaround in the manufacturing and non-oil sectors.
He said there was also an increasing reduction in the sectoral negative growth.
He said: “The latest figures released by the National Bureau of Statistics showed that the economy shrank by 0.52 per cent in the first quarter of 2017 (Q1 2017).
“Although the economy remains in recession this is the strongest performance in five quarters and shows a significant turnaround from the low of -2.34 per cent reached in the third quarter of 2016 (Q3 2016).
“This is nearly two percentage point improvement and also reflects the fact that the number of sub-sectors that experienced negative growth has almost halved falling from 29 sub-sectors for the whole of 2016 to 16 sub-sectors in Q1 2017.
“Agricultural growth remained in positive territory albeit growing at a slower rate of about 3.4 per cent, no doubt due to seasonal factors.
“Growth in manufacturing on the other hand returned to positive territory after five quarters of negative growth. It grew by 1.36 per cent in Q1 2017 after falling to a nadir of -7.0 per cent in Q1 2016.
“The solid mineral sector continued to justify the priority given to it by the Federal Government with high double digit growth for metal ores and quarrying at 40.79 per cent and 52.54 per cent respectively.
“Growth in the oil sector remained negative at -11.64 per cent although there was an over six percentage point improvement in its fortunes from the previous quarter.
“More significantly, the non-oil sector which accounts for about 90 per cent of GDP returned to positive growth although at a marginal level of 0.72per cent in Q1 2017. This is the first positive growth in the non-oil sector since the last quarter of 2015.
“Headline inflation fell for the third month in a row to 17.24 per cent, with core inflation also declining quite rapidly.
“However, food inflation remains of concern as it continues to trend upwards. This is mainly due to rising transport costs and other structural impediments to the movement of foods in the domestic market. The trade balance remained positive reflecting import contraction and relatively higher export revenues which grew year-on-year by up to 80.5 per cent.
“The overall picture that the figures show is that the economy is emerging slowly out of recession.
“This outlook is reinforced by positive trends in other indicators such as improved oil prices and increasing production, rising foreign exchange reserves, increased capital spending by the Federal Government as well as improved perceptions reflected in various purchasing and sales managers indices.
“Barring major economic shocks, it should still be possible to restore growth this year as projected in the Economic Recovery and Growth Plan.” he stated
Renaissance Capital (RenCap), an investment and research firm, said Nigeria’s Gross Domestic Product (GDP) this year could fall to 3.4 per cent against the targeted 4.5 per cent.
RenCap’s Sub-Saharan Africa Economist, Yvonne Mhango, said in a report titled: “Nigeria GDP: How low could growth go”, said that the most common way of measuring GDP is the production approach, which shows the industry composition of growth.
She said the expenditure approach is less common, because of problems with availability, timing, valuation and coverage of expenditure source data.
“The business registry is an important source of expenditure data as a large amount of retailing and consumer services output goes to household consumption, and a high share of building output goes to fixed investment. In Nigeria, a high share of businesses is in the informal sector and so is not covered by the business register,” it said.
She said Nigeria’s rebased GDP, measured via expenditure is only available over a short period, implying limited history to forecast from.
“However, when we consider the impact of lower oil and activity-stalling elections on expenditure, we think there is significant downside risk to our 2015 growth projection of 4.5 per cent. In particular, we see household consumption – which accounts for 70 per cent of GDP – slowing sharply in 2015, mainly due to negative real wage growth,” she said.
Mhango said the proposed cut in the 2015 budget oil price to N53/ per barrel against N77.5/per barrel in 2014, means government consumption, which accounts for eight per cent of GDP, could be slashed by one-third.
“We believe this implies a wage-freeze (at best) for government workers. That, coupled with rising inflation, signals that negative real wage growth could deepen. In addition to a fall in demand for imported consumer goods owing to naira weakness, the consumer may also be hit by a VAT hike to 10 per cent against five per cent,” she said.
Continuing, she said: “The 2015 budget presented to the National Assembly in December, proposed slashing capex by two-thirds to N387 billion (0.4 per cent of GDP). The recent cut in the proposed budget oil price suggests capex could fall further. This implies a decline in business for government-dependent contractors. Moreover, some corporates have announced that they are slashing their 2015 capex plans; Flour Mills, for one, plans to halve its capex. All this indicates a fall in fixed investment (15 per cent of GDP), which is negative for real GDP growth”.
She said a slowdown in net exports is likely to be tempered by a weaker-naira induced decline in imports. “This should mitigate the fall in exports. Given the headwinds expenditure is likely to face in the short term, we think GDP growth could turn out softer than our initial projections. We thus downwardly revise our real GDP growth forecasts to 3.4 per cent and four per cent in 2015 and 2016, respectively, from 4.5 per cent and five per cent previously,” she said.
