The recently released GDP report by the National Bureau of Statistics (NBS) has shown how Nigeria performed in the third quarter.
Of all the 46 sectors, 29 sectors contracted while growth was recorded in 17 sectors.
Here are some highlights from the report
Nigeria is officially in recession
In the third quarter, GDP contracted 3.62 percent down from 6.1 percent in the second quarter. This officially launched Africa’s biggest economy into its second recession in five years. An economy is said to be in recession after two consecutive quarters of negative economic growth as measured by a country’s GDP.
Oil Production hit four-year low
The Q3 report shows that Nigeria’s average daily oil production stood at 1.67 million barrels per day (mbpd), from 1.81 mbpd in Q2 2020. This is the lowest since the third quarter in 2016 when the economy faced a contraction that lasted for over a year.
The decline in oil production comes as Africa’s top producer cut production in order to comply with the demands of the Organization of Petroleum Exporting Countries (OPEC).
Real growth for the oil sector contracted at 13.89 percent in Q3, a sharp contraction from 6.49 percent in the same period last year and -6.6 percent in the second quarter.
The oil sector contributed 8.73 percent to total real GDP in Q3, down from 9.77 percent in Q3 2019 and 8.93 percent in Q2 2020.
Information and communications sector remains resilient
The Information and communications sector has continued to stay afloat amid the pandemic. The sector grew by 14.5 percent in the third quarter, up from 9.88 percent in the same period last year and 16.52 percent in the previous quarter.
The growth was largely driven by the telecommunication sector, growing by 17.36 percent in Q3 compared to 12.16 percent in the same period last year.
Manufacturing sector still in contraction but recovery is on
The Manufacturing sector remains in the negative region but the sector is showing signs of recovery. Although the sector shrank by 1.51 percent in the third quarter, the contraction is much lower than the 8.78 percent recorded in the previous quarter.
The sector was dragged by the oil refining sector which contracted by 68.2 percent during the third quarter compared to 30.77 percent in the same period last year, and 67.6 recorded in the second quarter of 2020.
Other sectors like the cement sector, food and beverage and chemical and pharmaceutical grew 11 percent, 5.57 percent and 6.6 percent respectively.
Quarrying and Mineral emerge the best performing sector
The Quarrying and other Mineral sector emerged the best performing sector, growing 41.81 percent compared to -6.39 percent in Q2’2020 and -14.02 percent in the third quarter 0f 2019.
Although, the growth was not sufficient to boost the overall mining and quarrying sector, as the latter plunged -13.2 percent from 6.19 percent recorded in the same period the previous year.
A rebound in the Construction sector
The report shows that the construction sector has put behind it the contraction period it experienced in the second quarter to record a positive growth in the third quarter.
The sector recorded a 2.84 percent growth in the Q3 compared to 2.37 percent recorded in the third quarter of 2019. The sector has been able to wipe out the 31.77 percent contraction recorded in the second quarter of 2020.
The rebound can be linked to the resumption in construction activities in the third quarter following the easing of the lockdown.
Finance and Insurance sector declines in Q3
The Finance and Insurance Sector which was the best performing sector in the second quarter has recorded a decline in growth in the third quarter.
The sector grew by 3.21 percent, a decline from 18.49 percent in Q2’2020 but an increase compared 1.07 percent in the third quarter of 2019.
Of the two sub-sectors, Financial Institutions grew 6.8 percent from 28.41 percent in Q2 2020 and 0.61 percent in Q3 2019.
However, the Insurance sector contracted by 18.67 percent in Q3 2020 from 29.53 percent in Q2 2020 and a growth of 3.96 percent in Q3 2019.
Trade sector still in contraction
The trade sector still remains weak in the third quarter of 2020.
The sector contracted 12.1 percent compared to 1.45 percent in the third quarter of 2019 and 16.59 percent in the second quarter of 2020.
Transport sector is the worst-performing sector
The transportation and storage sector was one of the worst performers in the third quarter of 2020 with almost all six activities under this industry recording negative growth rates in Q3 2020 except the Post and Courier Services which grew 1 percent.
Road transport, Rail and Air transport contracted the most with 46.6 percent, 46.4 and 38.8 percent respectively.
The gloom persists in the Real Estate sector
The Real estate sector contracted by 13.4 percent during the third quarter compared to 2.31 percent in the same period last year, and 21.99 recorded in the second quarter of 2020.