In the Gross Domestic Product (GDP) result for 2019 released today by the National Bureau of Statistics (NBS), Nigeria’s GDP grew by 2.55%(year-on-year) in real terms in the fourth quarter of 2019, Compared to the fourth quarter of 2018 which recorded a growth rate of 2.38%. This represents an increase of 0.17% points and an increase of 0.27% points when compared with the third quarter of 2019.
The final year 2019 result showed a GDP growth rate of 2.27%, compared to 1.91% in 2018.
In Q4 2019, aggregate GDP stood at N39,577,340.04 million in nominal terms. This was higher than the fourth quarter of 2018 which recorded an aggregate of N35,230,607.63 million, representing year on year nominal growth rate of 12.34%.
During the fourth quarter of 2019, average daily oil production of 2.00 million barrels per day (mbpd) was recorded, indicating a rise of 0.09mbpd over the daily average production of 1.91 mbpd recorded in the same quarter of 2018. On an annual basis, oil recorded 4.59% growth in 2019, higher compared to 0.97% recorded in 2018. The Oil sector contributed 7.32% to total real GDP in Q4 2019.
The non-oil sector grew by 2.26% in real terms during the quarter in focus. This was lower by -0.44% points compared to the rate recorded in the same quarter of 2018 but 0.42% point higher than the third quarter of 2019. This sector was driven mainly by Information and Communication (Telecommunications), Agriculture (Crop Production), Financial and Insurance Services (Financial Institutions), and Manufacturing. As the main drivers of the non-oil sector, Agriculture sector grew by 2.36% in full year 2019 from 2.12% in 2018 while the Telecommunications under Information and Communication sector grew by 11.41% in full year 2019 from 11.33% in 2018 and -2.04% in 2017.
POINTS TO NOTE
The current report by the NBS shows the highest quarterly and annual growth performance since the economic recession in 2016. This indeed speaks well to the diversification agenda of the Nigerian government as the Non-oil sector contribution to GDP continues to advance quarter on quarter.
The average daily oil production of 2mbpd can be attributed to the EGINA deep-water exploration by TOTAL which accounts for about 200,000bpd. While this is positive, it might not be sustainable in the light of OPEC restrictions.
The Agricultural sector is mainly driven by crop production. In the light of the AfCFTA, Nigeria has to look at value creation from agricultural produce to be able to compete with its counterparts. This would involve a strong focus on infrastructure, especially power.
The telecommunications subsector has continued to show positive signs from a negative in 2017 to a positive growth of 11.33% in 2019. This can be attributed to the internet penetration in Nigeria and the high of internet enabled devices providing huge opportunities for the sector.
The overall GDP figure of 2.27%, still falls below the population growth of about 2.6% giving a negative per-capita. While we are positive of the strides since the exit from the recession in 2016, we believe an enabling environment would drive the needed growth.