Nigeria’s GDP Contracts -14.3% In Q1 2020.
AMINA HUSSAINI, Abuja
Nigeria’s economy has contracted by -14.27 percent from the last quarter, as it recorded paltry 1.87 percent growth first quarter of 2020, dropping lower than the 5.59 percent recorded in the last quarter of 2019.
“Quarter on quarter, real GDP growth was –14.27 percent compared to 5.59 percent recorded in the preceding quarter” says the nation’s statistical agency, the National Bureau of Statistics (NBS).
The NBS in its latest report on Nigeria’s Gross Domestic Product (GDP) noted that it grew by 1.87 percent (year-on-year) in real terms in the first quarter of 2020.
Nigeria’s finance minister Zainab Ahmed last week presented a grim picture of the economy when she announced at the National Economic Council (NEC) meeting that the country slid into a negative in the first quarter of the year following a shortfall of N425.52 billion representing 31.1 percent in its oil revenue
The nation recorded only N940.90 billion as against N1.366 trillion oil revenue projected to come into the treasury between January and March 2020
“ The net oil and gas revenue inflows to the federation account in Q1 2020 amounted to N940.91 billion. This represents a shortfall of N425.52 billion or 31.1% of the prorated amount” according to Ahmed who stated that Nigeria is faced with perhaps the most challenging economic challenge in its history.
In the Bureau’s comparison to the first quarter of 2019, the performance recorded in Q1 2020 represents a drop of –0.23 percent points compared to Q1 2019 and –0.68 percent points compared to Q4 2019, reflecting the earliest effects of the disruption, particularly on the non-oil economy.
The report was recorded against the backdrop of significant global disruptions resulting from the COVID-19 public health crisis, a sharp fall in oil prices, and restricted international trade.
Oil prices plunge below plunged below the benchmark for the 2020 budget in the first quarter, creating dislocation and causing a review of the year’s fiscal policy in the second quarter.
According to NBS in the quarter under review, aggregate GDP stood at N35,647,406.08 million in nominal terms.
“This performance was higher when compared to the first quarter of 2019 which recorded N31,824,349.67 million, with a nominal growth rate of 12.01% year on year.
“Relative to the first quarter of 2019, the nominal growth rate was higher by 0.11 percent points but lower than the proceeding quarter by –0.32 percent points respectively.
The non-oil sector was reported to have contributed 90.50 percent to the nation’s GDP in the first quarter of 2020, less than its share in the first quarter of 2019 which was 90.78 percent and the fourth quarter of 2019 recorded as 92.68 percent.
The non-oil sector was driven mainly by information and communication (telecommunications), financial and insurance (financial institutions), agriculture (crop production), mining and quarrying (crude petroleum & natural gas), and construction.
Activities that witnessed weaker performance relative to Q1 2019 include quarrying, road transport, accommodation, and food services as well as real estate.
During the first quarter of 2020, the NBS reported average daily oil production of 2.07 million barrels per day (mbpd), higher than the 1.99mbpd recorded in Q1 2019 by 0.08mbpd and the fourth quarter of 2019 by 0.06mbpd.
The situation is global owing to the coronavirus crisis with health and economic implications across the world
The economy of Israel also shrank by 7.1 percent in the first quarter of 2020, due to the coronavirus pandemic. It is the first contraction since 2012 and the worst since at least 1995, flash estimates showed. a
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