The National Bureau of Statistics (NBS) says the nation Gross Domestic Product (GDP) grew by 1.40 per cent in the third quarter of 2017 in real terms, being the second consecutive positive growth since the economy came out of recession in the second quarter of the year.
The GDP report released yesterday by the National Bureau of Statistics (NBS) showed that this growth is 3.74 per cent points higher than the -2.34 per cent recorded in the corresponding quarter of 2016 and higher by 0.68 per cent points from the rate recorded in the preceding quarter, which was revised to 0.72 per cent from 0.55 per cent.
The NBS revised the Q2 rate following revisions by NNPC to oil output and hence led to revisions to oil GDP.
The report showed that in the quarter under review, aggregate GDP stood at N29.45 trillion in nominal terms, higher when compared to N26.54 trillion in Q3 2016, resulting in a nominal GDP growth of 10.98 per cent.
This growth is higher relative to that recorded in the third quarter of 2016 of 9.15 per cent.
During the period under review, oil production was estimated to have averaged 2.03 million barrels per day, being 0.15 million barrels higher than the revised daily average production recorded in the second quarter of 2017 (revised from 1.84 mbpd to 1.87 mbpd).
Oil production during the quarter was higher by 0.42 million barrels per day relative to the corresponding quarter in 2016, which recorded an output of 1.61mbpd.
Further analysis showed that real growth of the oil sector was 25.89 per cent (year-on-year) in Q3 2017. This represents an increase of 48.92 per cent relative to the rate recorded in the corresponding quarter of 2016.
Growth also increased by 22.36 per cent when compared to Q2 2017 which was revised from 1.64 per cent to 3.53 per cent. Quarter-on-Quarter, the oil sector grew by 21.10 per cent in Q3 2017
On the other hand, the non-oil sector grew by -0.76 per cent in real terms during the quarter under reference.
Presidency hails steady growth in agriculture, mining, others
The Federal Government has hailed the economic growth recorded in the third quarter of the year, as agriculture and mining continue to maintain steady growth.
Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, after the Q3 figures were released said the latest figure has shown a steady continuation of the positive growth of 0.55% (now revised to 0.72%) experienced in Q2 2017 and reinforces the exit from the 2016 recession.
“The positive growth in Q3 is consistent with the improvements in other indicators. Foreign exchange reserves have risen to nearly $34 billion while stock market and purchasing managers indices have also been positive.
“The naira exchange rate has stabilised while inflation has declined to 15.91% from 18.7 in January 2017. While inflation is not declining as fast as desirable, it is approaching the estimated target of 15.74% for the year in the Economic Recovery and Growth Plan.
Economy still remains vulnerable — Experts
Mr Olufemi Awoyemi, CEO of Proshare, was concerned that the same factors that led Nigeria to recession (factors in oil production, oil price) are still those driving the current economic growth.
He harped on the need for coherence in government policy to drive the economy towards the path of sustainability.
On his part Mr Bismarck Rewane, CEO of Financial Derivatives, believed the 1.4% Q3, 2017 GDP growth was good, but dangerous because it was predicated on oil, which meant that Nigeria was still an oil-dependent economy.
Rewane was of the view that Nigeria remained vulnerable to exogenous shocks, a position posited in a recent Moody report on the country.
The Financial Derivatives CEO made a strong case for policy sustainability, which he believed was key but called on monetary policy makers to take a review of the interest rate regime in the country.
From the analysis, the non-oil sector grew by -0.76%, lower by 0.79% compared to growth rate recorded same quarter in 2016 and 1.20% point lower than in the second quarter of 2017. Growth was driven by agriculture (crop), other services, and electricity, gas, steam and air conditioning supply.
Nominal GDP for Nigeria was N29.83 trillion in Q3, 2017 while real GDP stood at N18.03 trillion in the same quarter.
Speaking exclusively to Daily Trust, the National President of the Association of Business Development Professionals in Nigeria, Franklyn Akinyosoye, said the recorded leap in the nation’s GDP is largely due to increased crude oil exports and rising non-oil exports.
Akinyosoye, who is also the Managing Director of Dil Consulting, said reduction in inflation may have played a role in the rise in GDP as reduction in inflation leads to increased purchasing power of the people.
The expert said Nigerians now have more purchasing power to demand for more goods and services, meaning that companies can now produce more as consumption spikes.
He said Nigeria has to do more to keep improving the GDP as 1.4 per cent growth in GDP is still less than the 2.4 per cent population growth rate in the country.