Recession worsens as economy shrinks by 2.24 percent in Q3

Nigeria’s gross domestic product (GDP) shrunk by 2.24 percent in the third quarter of 2016, worsening the country’s chances of getting out of recession in 2016.

According to the National Bureau Statistics (NBS), the country’s GDP fell deeper than recorded in the first and second quarter of 2016.

The economy shrunk by 0.36 percent in the first quarter, and 2.06 percent in the second quarter of 2016.

For the country to get out of recession in 2016, it must record a GDP growth of at least 4.32 percent in the last quarter of 2016.

The oil sector contributed 8.19 percent of total real GDP, down from figures recorded in the corresponding period of 2015 and the preceding quarter of 2016 recorded at 10.27 percent and 8.26 percent respectively, NBS said.

The non-oil sector grew by 0.03 percent in real terms in the third quarter of 2016, reversing the last two quarters of negative growth recorded in Q1 and Q2 2016.

The sectors of the economy which recorded growth include: crop production, fishing, metal ores, textile and footwear, human health and social  services, public administration, technical services, financial institution, arts,entertainment and recreation.

Those that recorded decline were: Livestock, forestry, oil and gas, coal mining, quarry and other mineral, real estate, food and beverage, motor vehicle and assembly, iron and steel, electronic, chemical and pharmaceuticals, wood and wood products, cement, education, insurance and telecommunication.

Air transport also recorded a decline, while every other means of transportation in the country,recorded an increase.

SOMETHING GOOD IS HAPPENING TO AGRICULTURE

According to the report, “real agricultural GDP growth in the third quarter of 2016 stood at 4.54% (year-on-year), an increase of 1.07% points from the corresponding period of 2015”.

“Growth basically remained the same when compared with the previous quarter which was recorded as 4.53%.

“The contribution of Agriculture to overall GDP in real terms was 28.65% in the quarter under review, higher by 1.86% from its share in the corresponding quarter of 2015, also higher from the second quarter of this year by 6.10%”.

The federal government had initially projected a three percent growth rate for the country in 2016, while the International Monetary Fund (IMF) projected a 1.8 percent decline.

Moody’s, one of the big three credit rating agencies in the world, said on Sunday, that the country could report a growth of 2.5 percent in 2017.

“With resumption of oil production and the dollars that should come, we expect that Nigeria would be able to accelerate the implementation of the budget. With an acceleration, we expect that (growth) could reach 2.5 percent next year,” Aurelien Mali, Moody’s senior analytical adviser for Africa, told Reuters.

Mali said increases in oil output will help Africa’s top oil exporter generate more dollars.