The National Bureau of Statistics (NBS) says Nigeria has exited its worst economic recession in more than two decades, notching up growth of 0.55 per cent in the second quarter of 2017
In its report released on Tuesday, the data showed that the economic recovery was driven by improved performance of oil, agriculture, manufacturing and trade sectors of the economy.
Nigeria slipped into recession for the first time in more than two decades in August 2016.
According to the Nigerian gross domestic product report released by NBS, the economy recorded a positive growth after five consecutive quarters of contractions since Q1 2016.
“In the second quarter of 2017, the nation’s Gross Domestic Product (GDP) grew by 0.55% (year-on-year) in real terms, indicating the emergence of the economy from recession after five consecutive quarters of contraction since Q1 2016,” it said.
The 0.55% growth recorded is 2.04% higher than the rate recorded in the corresponding quarter of 2016 where a contraction of -1.49% was recorded.
Quarter-on-quarter, real GDP growth was 3.23%.
The oil sector was estimated to have averaged at 1.84 million barrels per day, which is 0.15 million barrels higher than the daily average production recorded in the first quarter of June.
The non-oil sector, which was driven by agriculture, finance and insurance, electricity, gas, steam and airconditioning supply and other services grew by 0.45% in real terms.
This is 0.83% higher than the rate recorded in second quarter 2016 and -0.28% lower than the rate recorded in first quarter of 2017.
The West African power has struggled to diversify its economy beyond oil and has suffered from militant attacks on oil facilities in the oil-rich Niger Delta.
“Unfortunately, the Nigerian government has not taken advantage of the crisis to make tough decisions that will forestall such a recession in the short and long term,” analyst SBM Intelligence said in a statement.
“The moment oil prices take a big enough hit again, Nigeria will be headed back to a recession.”
Statistician General Speaks
Yemi Kale, statistician general, had told Bloomberg in an interview that there was a likelihood that the economy exited recession in June 2017 but he was not sure because all the numbers had not been collated.
“Intuitively, we might be getting out of recession in the second quarter but I can’t say until all the numbers are in.”
“If it doesn’t happen in the second quarter, it will be a much reduced negative and it will definitely happen in the third quarter unless we have a new round of shocks in the later weeks.”
Nigeria, which depends on oil sector for 70 per cent of state revenues and 90 per cent of export earnings, has been battered by lower oil prices since mid-2014, which have slashed government revenues, weakened the currency and caused dollar shortages, frustrating business and households.
Analysts said the outlook for more growth looks positive for Nigeria.
“You can see that there have been improved performances in non-oil sectors in the second quarter,” said Bismark Rewane of the Lagos-based Financial Derivatives Company.
“The prospects for more robust growth are bright. I hope the current economic diversification efforts which see efforts being given to agriculture and mining will be sustained,” he said.
He said the nation’s economy would also bouy if ongoing truce with Niger delta militants was intensified.
“If there are no attacks on oil facilities and production is increased and Nigeria earns more money, then the economy will stabilise.”
Nigeria’s oil output has ramped up to an average of two million barrels per day from a low of 1.3 million in 2016 following government peace talks with the oil rebels.
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