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Nigeria’s GDP declines by 6% in Q2 — NBS

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Nigeria’s GDP declines by 6% in Q2 — NBS

Inflation increases to 12.82% in July — NBS

By Elizabeth Adegbesan

The country’s Gross Domestic Product (GDP) decreased (year-on-year, YoY) to- 6.10 per cent in real terms in the second quarter of the year (Q2’20) as non-oil GDP records first fall by 6.05 per cent since Q3’17.

In its GDP Report for Q2’20 released yesterday, the National Bureau of Statistics (NBS) said that the decline in GDP was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from the nationwide shutdown.

Also read: IMF further reduces Nigeria’s 2020 growth rate to -5.4%

According to the bureau, YoY, GDP fell by 8.22 percentage points in Q2’20 from 2.12 per cent recorded in Q2’19.

NBS noted that the oil sector and non-oil sector contributed 8.93 per cent and 91.07 per cent respectively to real GDP during the quarter as only 13 activities recorded positive real growth compared to 30 in the preceding quarter.

The report showed that real growth of the oil sector was –6.63 per cent YoY in Q2’20 indicating a decrease of 13.8 percentage points relative to 7.17 per cent recorded in the corresponding quarter of 2019.

The NBS stated:” Nigeria’s GDP decreased by –6.10 per cent YoY in real terms in the, ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.

“The decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

“When compared with Q2’19, which recorded a growth of 2.12 per cent, the Q2’20 growth rate indicates a drop of 8.22 percentage points, and a fall of 7.97 percentage points when compared to Q1’20 (1.87 per cent).

“Consequently, for the first half of 2020, real GDP declined by 2.18 per cent YoY, compared with 2.11 per cent recorded in the first half of 2019.

” Quarter on quarter, real GDP decreased by 5.04 per cent. Furthermore, only 13 activities recorded positive real growth compared to 30 in the preceding quarter.

On the oil sector, the report said:”In Q2’20, average daily oil production of 1.81 million barrels per day (mbpd) was recorded. This was -0.21mbpd lower than the daily average production of 2.02mbpd recorded in the same quarter of 2019, and –0.26mbpd lower than the first quarter 2020 production volume of 2.07mbpd.

“Real growth of the oil sector was –6.63 per cent (YoY) in Q2’20 indicating a decrease of 13.80 percentage points relative to the rate recorded in the corresponding quarter of 2019. Growth decreased by 11.69 percentage points when compared to Q1’20 which recorded 5.06 per cent.

” Quarter-on-Quarter (QoQ) , the oil sector recorded a growth rate of -10.82 per cent in Q2’20. The Oil sector contributed 8.93 per cent to total real GDP in Q2’20, down from figures recorded in the corresponding period of 2019 and the preceding quarter, where it contributed 8.98 per cent and 9.50 per cent respectively.

On the non-oil sector, the bureau stated: “The non-oil sector declined by 6.05 per cent in real terms during the reference quarter (Q2’20). It was the first decline in real non-oil GDP growth rate since Q3 2017. The recorded growth rate was 7.70 per cent points lower compared to the rate recorded during the same quarter of 2019, and -7.60 percentage points compared to Q1’20.

“Nevertheless, non-oil sector output was driven by Financial and Insurance (Financial Institutions), Information and Communication (Telecommunications), Agriculture (Crop Production), and Public Administration, moderating the economy-wide decline. On the other hand, sectors which experienced the highest negative growth included Transport and Storage, Accommodation and Food Services, Construction, Education, Real estate and Trade among others.

” In real terms, the Non-Oil sector accounted for 91.07 per cent of aggregate GDP in Q2’20, slightly higher than the share recorded in the second quarter of 2019 (91.02 per cent) as well as the Q1’20 (90.50 per cent)”.

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