Nigeria’s recession slows, economic growth beckons

The pace of Nigeria’s economic contraction slowed considerably last quarter, the National Bureau of Statistics, NBS  will disclose today.

The better than expected rate of economic collapse should raise the hope that Africa’s largest economy will exit recession by June some analysts say.

Businessday learnt that the fall in Nigeria’s GDP or the level of economic activity in the nation, will measure at -1.03% for the last quarter of 2016 compared with a collapse of -2.24% in the July to September quarter, -2.06% in the second quarter and -0.4% in the first quarter of the year.

If this is confirmed later today, it will work out to a year on year fall of around -1.03% contraction of the economy in the whole of 2016 compared with a growth of 2.14% in 2015.

The year end GDP and most especially the figure of the last quarter which will be released today could indicate that Nigeria might already be digging itself out ot what has been the most debilitating recession Nigeria has seen in recent time.

Nigeria entered its first technical recession since 2004 in the second quarter, marking a symbolic end to more than a decade of robust growth that turned the West African nation into the continent’s largest economy.

The country has now seen four consecutive quarters of declining growth,

Its vital oil industry has been hit by weaker global prices with government revenues tumbling, businesses shrinking their operations and engaging in massive staff lay offs to remain afloat.

But the government says there has been strong growth in other sectors.

Crude oil sales account for 70% of government income.

The price of oil has fallen from highs of about $112 a barrel in 2014 to below $56 at the moment.

Outside the oil industry, figures show the fall in the Nigerian currency, the naira, has hurt the economy, fueled inflation with both foreign and local investors holding back on spending.

Nigerian stock values are at their historic lows compared with peer Egypt where confidence has been boosted by a decision in November by the Central Bank of Egypt to float the local currency paving the way for significant forex inflows into the north African economy.

Only a week ago the Nigerian federal executive council approved an economic recovery and growth plan while the Central Bank of Nigeria began an aggressive programme of boosting supply of foreign exchange into the markets with the hope of bringing the stubborn black market rate to around N350/$