Nigeria’s Gross Domestic Product (GDP) grew by at 2.27 percent, higher than the 1.91 percent growth rate recorded in 2018, state-funded data agency, the National Bureau of Statistics (NBS) said Monday.
Here are six things we learnt from the NBS report.
Another year of negative per-capital GDP
The economy continued to underperform birth rate in 2019 for the fourth straight year.
Growth of 2.27 percent falls below the country’s annual population growth rate of about 3.2 percent. That implies that Nigerians are growing poorer. Average incomes have now contracted every year since 2016.
President Muhammadu Buhari, who assumed office in 2015 and promised to fight poverty and create jobs, a fight he is losing in the world’s latest poverty capital.
Not fast enough to deal with unemployment
Nigeria’s GDP is slowly picking up since the oil price crash of 2014, but not fast enough to deal with rising unemployment rate, which the NBS reported hit a near decade-high of 23 percent in the third quarter of 2018.
Nigeria making no headway in economic diversification
Africa’s biggest economy is still far from achieving its diversification plans as the growth of the economy is still driven by the oil sector despite the sector accounting about 9 percent of the GDP.
The non-oil sector which accounts for about 91.2 percent of Nigeria’s GDP remained flat at 2.06 per cent from a 2.00 per cent growth in 2018.
This is despite the huge efforts been put in place by the government to achieve higher economic growth that is not dependent on the oil sector.
The flat growth shows that the performance of the non-oil sector is still very weak and a reflection of shoddy macroeconomic fundamentals in the broad economy, according to Gbholahor Olorungo, an equity research analyst at CSL Stockbrokers.
CBN LDR policy pushes financial services to biggest growth since 2015
In 2019, Financial Institutions sector grew at 22.33 percent in Q4 compared to 0.61 percent in Q3, -3.52 percent in Q2, and -9.21 percent in Q1 respectively.
“We saw a very strong pick-up in credit when banks were rushing to meet up with the LDR requirement and as a result of this, we saw very strong growth in that sector that then had an impact on the aggregate GDP numbers,” Omotola Abimbola, a macro and fixed-income analyst at Chapel Hill Denham said.
Education, health exits recession in 2019
Human capital indicators such as education and human health and social services sectors of the Gross Domestic Product (GDP) existed recession in 2019
For full year 2019, the educator sector grew by 0.80 percent from -0.03 percent in 2018 and -0.72 percent in 2017. For health and social services, it grew by 0.31 percent in 2019 from -0.32 percent, -0.31 percent and -1.79 in 2018, 2017 and 2016 respectively.
Education sector had been in recession since 2017, while the Health and social services sector was in recession since 2016.
ICT sustains growth at 11.08percent as construction sector growth weakens
The Information and Communication sector remains one of the main drivers of non-oil growth sustaining growth at 11.08 percent compared to 9.65 percent in 2018.
The construction sector annual growth decreased to 1.81percent in 2019 compared to 2.33 percent in 2018.
