Nigeria’s economy contracted by 1.5% in 2016, says NBS

Nigeria’s economy contracted slower than expected in 2016, by 1.51 percent as agriculture showed resilience on account of increased yield as well as pick up in oil production and prices within the last quater of the year.
The International Monetary Fund (IMF) had aggressively slashed it’s 2016 forecasts for Nigeri’s Gross Domestic Product (GDP) to -1.7 percent, citing weak currency, low oil production and price challenges which had dealt a blow to government earnings and foreign exchange constraints.
” For the full year 2016, therefore GDP contracted by -1.51%, indicating real GDP of N67,984.20 billion for the year. This contraction reflects a difficult year for Nigeria, which included weaker inflation- induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency, and problems in the energy sector such as fuel shortages and lower electricity generation,” the National Bureau of Statistics (NBS) noted in its latest GDP numbers released on Tuesday.
The NBS said for the full year 2016, aggregate nominal GDP stood at N101,598,482.13m compared to N94,144,960.45m.
According to NBS, fourth quarter of 2016 saw the nation’s Gross Domestic Product (GDP) contract by -1.30% (year-on-year)in real terms, from 18,533.75billion in Q42015 to N18,292.95 billion in Q4 2016.
“This decline was less severe than thedeclinerecordedinthepreviousquarter,of -2.24%,butwasnevertheless lower than the growth rate recorded in the final quarter of 2015, of 2.11% (see Fig. 1). Quarter on quarter, real GDP increased by 4.09%,which partly reflects seasonal factors as well as arise in the general price level,” the bureau stated.
Nominal GDP was N29,292,998.54 million at basic prices in the fourth quarter of 2016, which represents year on year nominal growth of 12.97%.
In contrast to real growth, this is 5.84% points higher than the rate recorded in the same quarter of 2015, implying that the GDP deflator increased faster than the earlier period.
The NBS estimated Oil production at 1.90million barrels per day (mbpd) in the fourth quater.
This was 0.27million barrels per day higher than production in the previous quarter, but lower than production in the same quarter of 2015 by 0.25million barrels per day, when output was recorded at 2.16mbpd.
But for the full year 2016, oil production was estimated to be 1.833mb/day, lower than 2.13mb/day in 2015 and largely largely been attributed to vandalism in the Niger Delta region.
As a result, the sector contracted by -13.65%; a more significant decline than that in 2015 of -5.45%. This reduced the oil sectors share of real GDP to 8.42% in 2016, compared to 9.61% in 2015.
In the fourth quarter of 2016 this sector declined by -12.38% in real term (year-on-year).
This was though, an improvement relative to the previous quarter, when the sector declined by -22.01%, but nevertheless was a more severe decline than in the fourth quarter of 2015, when a contraction of -8.23% was recorded.
As ashare of theeconomy,the Oil sector represented 7.15% of total real GDP, compared to 8.06% in Q4 2015 and 8.19% in Q32016.
The non-oil sector declined by -0.33% in real terms in the fourthquarter of 2016.
This was 0.36% points lower than growth of 0.03% recorded in Q3 2016, and 3.46% points lower than the 3.14% growth recoded in Q4 2015.
“Given that the growth rate was stronger than in the oil sector, the non-oil sector increased its share of GDP to 92.85%, from 91.94% in the fourth quarter of 2015.
The NBS said the sector that weighed on non-oil growth the most was Real Estate, which declined by -9.27% and contributed to –0.77% points to year on year growth in total real GDP.
“However, Manufacturing, Construction and Trade also made significant downwards contributions, ameliorated slightly by continuing strong growth in Agriculture (especially CropProduction),” the NBS stated.
For full year 2016, the non oil sector declined by -0.22% in real terms, compared to a growth rate of 3.75% in 2015, a difference of 3.97%points.