ABUJA: According to National Bureau of Statistics (NBS), The Nigerian economy has continued to keep the pace of positive growth since its emergence from recession in Q2 2017.
The NBS data show that Nigeria’s gross domestic product (GDP) grew by 0.83 percent higher by 2.42 percent in 2017 after shrinking by -1.58 percent in 2016, which was its first annual contraction in 25 years. The entire economy grew in the fourth quarter of 2017 by 1.92 percent- year-on-year.
Aggregate GDP stood at N31 trillion in nominal terms, higher than N29 trillion in Q4 2016, resulting in a nominal GDP growth of 6.99 percent.
The growth, according to NBS, is compared to a contraction of -1.73 percent recorded in Q4 2016 and a growth of 1.40 percent recorded in Q 2017.
The year 2017 recorded a real annual growth rate of 0.83 percent higher by 2.42 percent than -1.58 percent recorded in 2016.
Nigeria’s economy, which depends largely on crude sales, fell into recession in 2016 largely as a result of low crude prices and militant attacks on oil facilities in the Niger Delta region.
It returned to growth in the second quarter of 2017 but the recovery has been fragile since it is largely due to higher oil prices.
The International Monetary Fund (IMF) said in December that the economy remains vulnerable.
The GDP growth experienced was driven by growth in crop production, crude production and natural gas, metal ores, construction, transportation and storage, trade, electricity and gas production.
For the full year, the agricultural sector grew by 3.45 percent and the industrial sector grew by 2.19 percent as against -8.85 percent in 2016.
Crude production grew by 4.79 percent in 2017 as against -14.45 percent in 2016 while coal mining recorded a negative growth of -1.45 percent as against 1.0 percent in 2016.
Oil refining recorded a negative growth of -27.70 percent as against the 2.53 percent in 2016.
Electricity and gas grew by 16.43 percent for the full year as against the negative growth of -15.0 percent in 2016.
Construction, which includes cement and road construction, recorded a positive growth of 1.0 percent in 2017 as against -15.0 percent while trade recorded a negative growth of -1.05 percent, even lesser than the negative growth of -0.24 percent in 2016.
According to the NBS, oil production rose to 1.91 million barrels a day in the last quarter of 2017 compared with 1.76 million barrels recorded in the same period of 2016.
The recession in 2016 was largely caused by low crude oil prices and militant attacks on energy facilities in the Niger Delta.
The non-oil sector grew by 1.45 percent in real terms during the reference quarter. This is higher by 1.78 percent point compared to the rate recorded same quarter, 2016 and 2.21 percent point higher than in the third quarter of 2017.
The non-oil sector recorded an annual growth of 0.47 percent compared to -0.22 in 2016. This sector was driven this quarter mainly by agriculture (crop), trade and transportation and storage. In real terms, the non-oil sector contributed 92.83 percent to the nation’s GDP, lower from share recorded in the fourth quarter of 2016 (93.25%) but higher than in the third quarter of 2017 (89.96%). Annual contribution was 91.32 percent and 91.65 percent in 2016.
Nominal GDP growth of manufacturing in the fourth quarter of 2017 was recorded at 9.20 percent (year-on-year), 5.64 percent points higher than figures recorded in the corresponding period of 2016 (3.56%), however, -1.12 percent points lower than the preceding quarter figure of 10.32 percent.
Quarter-on-quarter growth of the sector is recorded at 5.95 percent while annual growth rate was recorded as 12.82 percent higher than -0.79 percent recorded the previous year. The contribution of manufacturing to nominal GDP in the current quarter was 8.54 percent, higher than figures recorded in the corresponding period of 2016 at 8.37 percent and third quarter of 2017 at 8.55 percent.
The annual contribution was recorded as 8.83 percent in 2017 and 8.77 percent in 2016.
Real GDP growth in the manufacturing sector in the current quarter of 2017 was 0.14 percent (year-on-year), higher than the same quarter of 2016 and the preceding quarter by 2.68 percent points and 2.99 percent points, respectively.
The growth rate of the sector on a quarter-on-quarter basis stands at 5.02 percent and annually stands at -0.21 percent. This is 4.11 percent points higher than the 2016 annual growth rate of -4.32. Real contribution to GDP in 2017 fourth quarter is 8.88 percent with an annual contribution of 9.18 percent in 2017 and 9.28 percent in 2016.
Razia Khan, Chief Economist for Africa at Standard Chartered Bank, said, “The growth rate still lags far behind where Nigeria should be,” noting that the full-year growth was higher than the 0.7 percent forecast by her bank.
“Unless the 2018 budget is approved soon … higher oil prices alone are not going to be sufficient to provide a really strong lift to the GDP numbers,” she said.
Johnson Chukwu, Managing Director, Cowry Asset Management Limited, said the indication of the new figures is that Nigeria is now witnessing a more diversified growth as some sectors which hitherto have little or no contribution to GDP are now contributing.
“For me it indicates that the economy is now on a consistent positive trajectory. We have seen the GDP growth from 0.72 percent in the second quarter of last year to 1.40 percent in third quarter and 1.92 percent in the fourth quarter.
“Annual GDP performance is at 0.83 percent in 2017 and 0.52 percent in the preceding year 2016.
“Most importantly, we are seeing consistency in GDP but for me what is most gladdening is that the GDP has become more balanced and less volatile. In the third quarter, the GDP growth of 1.40 percent was largely driven by the oil and gas sector and the real sector contracted by 0.36 percent. We now have a more diversified growth.”
