Nigeria’s Gross Domestic Product has contracted by 0.36% for the first time in 12 years, data released by the National Bureau of Statistics (NBS) has shown.
During the quarter, aggregate GDP stood at N22.26 trillion (in nominal terms) at basic prices. Compared to Q1 2015 value of N21.04 trillion, nominal GDP was 5.80% higher.
The current growth numbers confirm the fear of macroeconomic analysts who have warned that the economy is in recession. The economy has performed poorly compared to the 2.11 percent growth recorded in the previous three months. The last time the economy contracted was the second quarter of 2004.
Falling prices of crude, from which Nigeria derives up to 70 percent of state revenue, have caused the nation’s economic outlook to deteriorate as the government struggles to pay salaries and stimulate growth, forcing it to increase borrowing.
President Muhammadu Buhari has resisted calls from investors to devalue the naira, which has been pegged at 197-199 per dollar for more than a year. Foreign-exchange trading restrictions and import curbs have led to shortages of goods from gasoline to milk.
“The government has to be proactive, even as militants continue to decimate oil output in the Niger-Delta,” Bongo Adi told BusinessDay on the phone.”Disruptions could affect the country’s budget and growth could further suffer is the militants are not called to order.”
Oil output fell to 2.11 million barrels per day in the first quarter, from 2.18 million barrels a year earlier. Oil contributed 10.29 percent to GDP in the quarter through March.
In Q1 2016, oil production stood at 2.11million barrels per day (mbpd) 0.05mbpd lower from production in Q4 of 2015. Oil production was also lower relative to the corresponding quarter in 2015 by 0.07mbpd when output was recorded at 2.18mbpd, the NBS says.
While activities such as Crop production, Trade and Telecommunications & Information Services supported growth of the sector, growth was weighed upon by declines in Manufacturing, Financial Institutions, and Real Estate. The sector slowed 0.18% in real terms in Q1 of 2016.
This was 5.77% points lower from the corresponding quarter in 2014 (Figure 3) and 3.32% points from the previous quarter. In real terms, the Non-Oil sector contributed 89.71% to the nation’s GDP, marginally higher from shares recorded in Q1 of 2016 (89.55) yet lower from and Q4 2015 (91.94%).
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