Nigeria has entered its second recession in five years after the economy contracted in the third quarter of 2020.
Gross Domestic Product (GDP), which measures the total monetary value of goods and services produced in the country within one year, contracted by 3.62 percent in Q3’20, the National Bureau of Statistics (NBS) said in its quarterly report released Saturday.
A recession is defined as two straight quarters of negative growth.
In line with BusinessDay estimate, the Q3 GDP figure was a lighter contraction compared to a cut of 6 percent recorded in the second quarter, when the economy first felt the impact of the pandemic, and a growth of 2.12 percent the same quarter last year.
Both the oil and the non-oil sectors of the economy contracted. Non-oil output fell 2.51 percent in the quarter compared to a contraction of 6.05 percent in Q2’20, and a growth of 1.64 percent in Q2’19, while oil output shrank by 13.89 percent from a contraction of 6.63 percent in Q2’20 and a growth of 7.17 percent in Q3’19.
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The country entered a recession in 2016 after a global collapse in oil price and a restiveness in the Niger Delta region contracted oil output, stunting growth.
The economy, however, managed to limp out of recession in Q2 2017 with a growth of 0.55 percent, helped by uptick in oil production.
The economy will probably contract by 4.3 percent in the year 2020 and will take until 2023 before any meaningful recovery, according to predictions by the International Monetary Fund (IMF).
The IMF forecast of recovery in three years was premised on the fact that Africa’s largest economy entered the pandemic with very weak economic fundamentals including escalating debt, low revenue, high unemployment and falling per capita income.
The NBS had earlier scheduled November 23 for the official release of the data but pulled the date forward due to an undisclosed reason.
