Nigeria's GDP grows 2.38% in fourth Quarter of 2018

Fri, Feb 15, 2019 | By publisher


Economy, Featured

Udoma Udo Udoma, minister of budget and national planning, says Nigeria’s economy has turned the corner and is now firmly on the path of growth

By Anayo Ezugwu

THE latest Gross Domestic Product, GDP, report released by the National Bureau of Statistics, NBS, has showed that Nigeria’s economy is recovering . The GDP report recorded a growth of 2.38 percent in the fourth quarter of 2018.

The report also indicated that the services sector grew by 1.83 percent in 2018 compared to -0.82 percent in 2016 and -0.91 percent in 2017. Some of the services sectors are construction, transport and storage, Information and communication, art, entertainment and recreation, and electricity supply.

They also include water supply, waste management, accommodation and food services, financial and insurance as well as health and social services. For instance, the construction sector grew by 58.51 percent in fourth quarter of 2018 in nominal terms.

These figures reflected an increase of 39.26 percent points when compared to the growth rate of 19.25 percent that was recorded in fourth quarter of 2017. It also showed an increase of 5.84 percent points when compared to its growth rate in the preceding quarter. Quarter on quarter, nominal growth in this sector was 26.41 percent, while for 2018, nominal growth rate was 40.85 percent.

Furthermore, the sector contributed 5.03 percent to nominal GDP in fourth quarter, 2018, which was higher than both the 3.58 percent contribution 2017 and the 4.20 percent contribution recorded in third quarter, 2018. On an annual basis, nominal contribution to GDP in 2018 also improved (4.72 percent), compared to 2017 (3.77 percent).

Overall, the sector’s contribution to real GDP in fourth quarter 2018 remained relatively unchanged (3.48 percent) compared to 2017 (3.49 percent), but higher than in the preceding quarter (3.01 percent). The sector’s contribution to total real GDP in 2018 also remained relatively stable at 3.73 percent compared to 2017.

Meanwhile, the transport and storage sector’s contribution to real GDP in fourth quarter 2018 was 1.46 percent and 1.37 percent for the whole of 2018, road transport being the dominant activity (85 percent). Six activities made up the transportation and storage sector: road, rail and pipelines, water air transport, transport services; and post and courier service.

In real terms, the information and communication sector recorded a growth rate of 13.20 percent in fourth quarter of 2018, representing an increase of 14.65 percent points when compared to fourth quarter, 2017. Quarter on quarter, the sector exhibited a real GDP growth rate of 23.75 percent. For 2018, real GDP growth rate stood at 9.65 percent. By contribution to the economy, the sector accounted for 12.40 percent of total real GDP in fourth quarter, 2018 and 12.22 percent of total real GDP in 2018.

Also, arts, entertainment and recreation sector grew by 5.06 percent in fourth quarter 2018 in nominal terms. This represented an increase of 1.51 percent points relative to the preceding quarter and an increase of 0.89 percent points relative to the preceding year.

Annual growth in nominal terms was 3.06 percent in 2018, a decline from 9.07 percent recorded in 2017. By contribution, the activity accounted for 0.18 percent of nominal GDP in fourth quarter, 2018 and 0.21 percent of total annual nominal GDP in 2018.

In real terms, the activity grew by 4.18 percent in fourth quarter, 2018 which was higher than the rate recorded in fourth quarter, 2017 and third quarter, 2016. The rate recorded in fourth quarter 2017 was 0.64 percent points higher and the rate recorded in third quarter, 2018 was 1.35 percent points higher.

On an annual basis, real GDP growth rate was slower for the activity in 2018 at 2.53 per cent compared to 4.13 per cent recorded in 2017. Arts, entertainment and recreation contributed 0.20 percent to real GDP in fourth quarter, 2018 and 0.22 percent for the whole of 2018, remaining relatively stable over the past year.

Reacting to the GDP report released by the NBS, Udoma Udo Udoma, minister of  budget and national planning, said Nigeria’s economy has turned the corner and is now firmly on the path of growth. In a tweet through the budget and national planning ministry’s twitter handle, the minister said report showed the strongest performance since the economy emerged from recession.

“It shows that 39 out of 46 economic activities are now growing. Agriculture is growing; manufacturing is growing, and services has recorded its best performance in 11 Quarters. Particularly notable is the fact that the growth is driven by the non-oil sector which has recorded its strongest growth since the fourth quarter of 2015. In short, we have turned the corner and are now firmly on the path of growth,” he said.

Udoma said the current real GDP growth performance is most encouraging and shows a movement in a very positive direction, especially with regard to the non-oil sector performance; and assured that with the Buhari Administration’s continuing commitment to the implementation of the ERGP, the economy is expected to further strengthen in 2019, and over the medium term.

He explained that at inception the administration faced real crisis in the economy which included a sharp drop in oil revenues with consequent fiscal challenges as the federal government had to struggle to meet its commitments while many States were unable to pay salaries on a regular basis.

“Investors and businessmen complained about the difficulties they encountered in doing business in Nigeria; Foreign reserves had dropped from $37.33 billion in June 2014 to $23.81 billion in September 2016 and inflation had risen from 9.2 percent in June 2015 and peaked at 18.5 percent in December 2016 coupled with exchange rate instability as the Naira lost value in the parallel market, ultimately falling to as low as N520/US$,” he said.

– Feb. 15, 2019 @ 15:55 GMT |

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