Business
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Statistics from the National Bureau of Statistics show Nigeria’s economy is on its way to recovery
| By Anayo Ezugwu | Mar 13, 2017 @ 01:00 GMT |
BASED on figures released by the National Bureau of Statistics, financial experts are hopeful Nigeria’s economy will recover faster than previously projected. In the fourth quarter of 2016, Nigeria’s Gross Domestic Product, GDP, contracted by -1.30 percent (year-on-year) in real terms from N18,533.75 billion in fourth quarter of 2015 to N18,292.95 billion in fourth quarter of 2016. This decline was less severe than the decline recorded in the previous quarter, of -2.24 percent, but was lower than the growth rate recorded in the final quarter of 2015 of 2.11 percent.
According to the annual report released by the National Bureau of Statistics, NBS, on its website, on Tuesday, February 28, the quarter-on-quarter, real GDP increased by 4.09 percent, which partly reflects seasonal factors as well as a rise in the general price level. For the full year 2016, therefore GDP contracted by -1.51 percent, indicating real GDP of N67,984.20 billion for the year.
This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency, and problems in the energy sector such as fuel shortages and lower electricity generation.
Nominal GDP was N29,292,998.54 million at basic prices in the fourth quarter of 2016, which represents year on year nominal growth of 12.97 percent. In contrast to real growth, this is 5.84 percent points higher than the rate recorded in the same quarter of 2015, implying that the GDP deflator increased faster than the earlier period. For full year 2016, aggregate nominal GDP stood at N101,598,482.13 compared to N94,144,960.45.
The Nigerian economy can be more clearly understood according to the oil and non-oil sector classifications. In the oil sector, during the period under review, oil production was estimated at 1.90 million barrels per day, mbpd. This was 0.27 million barrels per day higher than production in the previous quarter, but lower than production in the same quarter of 2015 by 0.25 million barrels per day, when output was recorded at 2.16 mbpd.
For the full year 2016, oil production was estimated to be 1.833 mbpd compared to 2.13mbpd in 2015. This reduction has largely been attributed to vandalism in the Niger Delta region. As a result, the sector contracted by -13.65 percent; a more significant decline than that in 2015 of -5.45 percent. This reduced the oil sectors share of real GDP to 8.42 percent in 2016, compared to 9.61 percent in 2015.
In the fourth quarter of 2016 this sector declined by -12.38 percent in real term (year -on-year). This was an improvement relative to the previous quarter, when the sector declined by -22.01 percent, but nevertheless was a more severe decline than in the fourth quarter of 2015, when a contraction of -8.23 percent was recorded. Quarter-on-quarter, real oil GDP grew by 8.07 percent. As a share of the economy, the oil sector represented 7.15 percent of total real GDP, compared to 8.06 percent in fourth quarter of 2015 and 8.19 percent in third quarter of 2016.
While the non-oil sector declined by -0.33 percent in real terms in the fourth quarter of 2016. This was 0.36 percent points lower than growth of 0.03 percent recorded in third quarter of 2016, and 3.46 percent points lower than the 3.14 percent growth recoded in fourth quarter 2015. Given that the growth rate was stronger than in the oil sector, the non-oil sector increased its share of GDP to 92.85 percent, from 91.94 percent in the fourth quarter of 2015.
The sector to weigh on non-oil growth the most was real estate, which declined by -9.27 percent and contributed to –0.77 percent points to year on year growth in total real GDP. However, manufacturing, construction and trade also made significant downwards contributions, ameliorated slightly by continuing strong growth in agriculture especially crop production.
Reacting to the development, financial analysts said the economy was recovering faster than what was projected by international financial institutions. Uche Uwaleke, head, banking and finance department, Nasarawa State University, told Realnews that the economy was showing signs of recovery, adding that the expectations that it would be out of recession this year would be realised at the current pace of growth.
“It means there is an improvement and things are getting better. Before now, the rate of decline has been rising, and for the first time in nine months, the rate of decline is reducing, which goes to show there is hope; and before the year runs out, we will record a positive growth of the GDP,” he said.
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