In the first quarter of 2017, Nigeria’s Gross Domestic Product (GDP) contracted by –0.52% (year-on-year) in real terms, the National Bureau of Statistics (NBS) said Tuesday, representing the second consecutive quarter of milder contraction and boosting optimism that an economic recovery is in the works.
It is however the fifth consecutive quarter of contraction since Q1 2016. The median estimate of 14 analysts in a BusinessDay survey was for a 0.7 percent contraction.
“The Q1 GDP figure came in better than our -0.7% estimate” said Pabina Yinkere, head of institutional business at Lagos-based Vetiva Capital.
GDP contraction in the said quarter is 120 basis points less than the 1.7 percent contraction in the final three months of 2016.
The oil sector also contracted at a slower pace compared to the previous quarter while the non-oil sector exited from negative territory.
The oil sector recorded a negative growth of 11.64% (from –17.70% in Q4-2016 and -4.81% in Q1-2016).
Over the three months period, output from the oil sector was affected by relatively lower domestic crude oil production as the effect of militants’ attacks on crude oil & gas facilities in 2016 lingered. The NBS estimated crude oil production during the three months period to be 1.83mbpd, which improved from the 1.76mbpd reported in Q4-16, but was much lower than the 2.05mbpd achieved in Q1-2016. Compared to Q4-16, the oil sector grew by 14.86%.
The non-oil sector exited the negative growth region, growing by 0.72% y/y in Q1-2017 (compared to -0.33% y/y in Q4-2016 and -0.18% y/y in the corresponding quarter of 2016). Output growth in this sector was supported by activities in the following subsectors: agriculture, manufacturing, information and communication, transportation, and other services.
A quick look at the breakdown of two of the biggest components of the GDP shows that agriculture grew by 3.39% y/y (vs. 4.03% y/y in Q4-2016) while trade declined by 3.08% y/y (vs. -1.44% y/y in Q4-16).
In terms of contribution, services, agriculture, and industries, respectively, accounted for 55.45%, 21.35%, and 23.21% of overall output growth
The International Monetary Fund (IMF) projects that Nigeria’s economy would record 0.8 percent growth in 2017.
During the quarter, aggregate GDP stood at N26,028,356.03 million in nominal terms, compared to N22,235,315.29 million in Q1 2016, resulting in a Nominal GDP growth of 17.06%. This growth was higher relative to growth recorded in Q1 2016 (11.39%).
