Nigeria’s 2018 economic performance in 6 Charts

The Nigerian economy started 2018 on a positive note having just exited the worst recession it had ever experienced over the last 27 years in Q2 2017 and being named Africa’s best performing stock market in 2017. With much exuberance, Nigerians and investors headed into 2018 with expectation of continuous growth. Here are five charts explaining the Nigerian economy in 2018. For the full details of how the Nigerian economy fare in 2019, look forward to BusinessDay Research and Intelligence Unit (BRIU) Economic Outlook in January.

Economic Growth slows down in 2018
Economic growth measured by the percentage change in Gross domestic product (GDP) reflected that the economy was on the path of recovery in 2017 buoyed by two consecutive quarters of positive and increasing growth (Q3 and Q4 2017). However, the pattern did not continue in 2018 as growth started to trend downwards. Growth slowed down to 1.95 percent in Q1 and dropped to 1.50 percent in Q2, before rising to 1.81 percent in Q3 2018 according to data from National Bureau of Statistics (NBS).

Declining crude Oil production
One major reason behind the slowing down of the economy in Q2 2018 was the fall in crude oil production. Data gathered from NBS showed that in Q1 2018, oil production dropped from 2.0 million barrels to 1.84 million barrels in Q2 2018 following the trend in GDP growth rate. Likewise, the uptick in the economy in Q3 coincided with an increase in oil production to 1.94 million barrels in Q3 2018.

Asian countries emerge as top trading partners with Nigeria in Q3
Total trade in Q3 rose by 30.7 percent to reach N9.025 trillion in 2018. The trade deals struck with China made the country the second largest trading partner with Nigeria in terms of imports behind South Korea that ranked top. In terms of exports, Nigeria’s largest trading partner was India in Q3 2018. South Korea and China combined accounted for 43.28 percent of imports into Nigeria.

The Nigerian stock market suffers in 2018
Year-to-Date analysis of the Nigerian All Share Index (ASI) shows that as at December 28, the Nigerian stock market was down by about 18.84 percent. Investors’ sentiments towards the Nigerian stock market have mostly been negative as uncertainties concerning the political direction of the economy in 2019 have weighed in on investment decisions.

Inflation trended downward for a historic 18 consecutive time
July 2018 made it the 18th unprecedented and consecutive decline in the inflation rate in Nigeria. The Consumer Price Index (CPI) inflation had been decelerating since February 2017. As at January 2018, inflation had dropped to 15.13 percent and by July it had fallen further to 11.14 percent. In the following month, August, inflation then rose to 11.23 percent.

The Central Bank of Nigeria (CBN) leaves the Monetary Policy Rate (MPR) Unchanged in 2018

The CBN maintained the MPR at 14 percent throughout 2018. The decision to leave the MPR unchanged centred on the belief that raising the rate could hamper the already slowing growth in the economy as domestic credit would become costlier inhibiting investment and leading to a fall in output. While the decision not to reduce the MPR rested on the notion that lowering the rate may not lead to lowering market lending rate on account of the high cost of doing business.