The National bureau of statistics (NBS) in its latest Gross Domestic Product (GDP) report has it that the Nigerian grew by 1.87%(year-on-year) in real terms in quarter 1 2020 (Q1). The performance recorded in Q1 2020 represents a drop of –0.23% points compared to Q1 2019 and –0.68% points compared to Q4 2019. Quarter on quarter, real GDP growth was –14.27%.
In the quarter under review, aggregate GDP stood at N35,647,406.08 million in nominal terms. This performance was higher when compared to the first quarter of 2019 which recorded N31,824,349.67 million, with a nominal growth rate of 12.01% year on year.
According to the NBS, “the performance was recorded against the backdrop of significant global disruptions resulting from the COVID-19 public health crisis, a sharp fall in oil prices and restricted international trade”.
OIL SECTOR CONTRIBUTION
During the first quarter of 2020, an average daily oil production of 2.07 million barrels per day (mbpd) was recorded. The production level was higher than the 1.99mbpd recorded in the same quarter of 2019 by 0.08mbpd and the fourth quarter of 2019 by 0.06mbpd.
The oil sector recorded a real growth rate of 5.06% (year-on-year) in Q1 2020 indicating an increase of 6.51% points relative to the rate recorded in the corresponding quarter of 2019. The Oil sector contributed 9.50% to aggregate real GDP in Q1 2020.
NON-OIL SECTOR CONTRIBUTION
The report has it that the non-oil sector grew by 1.55% in real terms during the reference quarter (Q1 2020). This was slower by -0.93% points compared to the rate recorded during the same quarter of 2019, and -0.72% points slower than the fourth quarter of 2019.
The non-oil sector was driven mainly by Information and Communication (Telecommunications), Financial and Insurance (Financial Institutions), Agriculture (Crop Production), Mining and Quarrying (Crude Petroleum & Natural Gas), and Construction. In real terms, the Non-Oil sector contributed 90.50% to the nation’s GDP in the first quarter of 2020.
- Though the NBS believes that the performance was recorded against the backdrop of global disruptions from the COVID-19, we believe the effect of the pandemic will be seen more in the Q2 2020 GDP figures. Due to the shutdown of economic activities in Nigeria, we expect a negative return of over 3%.
- The sectoral contribution to GDP with the oil sector on 9.50% and the non-oil on 90.5% shows that the Nigerian economy is well diversified but not on the revenue front. A well-diversified economy in terms of product creates an opportunity for income diversification if the right support is given to other sectors especially infrastructure.
- Crop production still remains the main driver in the agric sub-sector, as it accounts for 90.54% of overall nominal growth of the sector in the first quarter of 2020. There is indeed the need for value creation in this sector as it would create foreign exchange earnings.
- The Information and Communication sub-sector as continued to advance on its contribution to the overall GDP. The sector contributed 14.07% to total real GDP in Q1 2020, higher than its contribution a year earlier (13.32% ) and in the preceding quarter, in which it accounted for 13.12%. This can be attributed to the increased internet penetration in Nigeria and the level of communication device usage.
To read the full report by the NBS visit https://t.co/Jz9hlMyyNp?