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Nigeria’s 2nd Quarter GDP shrinks by 6.10% –NBC

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Nigeria’s Gross Domestic Products (GDP) for the second quarter 2020 shrank by 6.10 percent, the National Bureau of Statistics (NBS) said on Monday.

The GDP which measures the total monetary or market value of all the finished goods and services produced within its borders, contracted by 6.10% year on year in real terms in the second quarter of the year.

It marked an end to a three-year of low but positive real growth rates witnessed since the 2016/2017 recession.

“The decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

“The domestic efforts ranged from initial restrictions of human and vehicular movement implemented in only a few states to a nationwide curfew, bans on domestic and international travel, closure of schools and markets etc., affecting both local and international trade”, the NBS said in its Nigerian Gross Domestic Product Report (Q2 2020).

Compared with Q2 2019, which saw an expansion of 2.12%, the Q2 2020 growth rate shows a drop of -8.22% points, and a fall of -7.97 points relative to the first quarter of 2020. Consequently, real GDP for the first half of this year diminished by -2.18% year on year compared to a growth of 2.11% reported in the same period of 2019. Quarter on quarter, real GDP declined by -5.04%.

In Q2 2020, Nigeria’s nominal GDP stood at N34.023 trillion, 2.8% lower than that of the corresponding period of 2019, which was N35.002 trillion.

Crude oil production in Nigeria, Africa’s largest economy and top oil producer, fell to 1.81 million barrels per day within the period, compared to 2.02 million in Q2 2019 and 2.07 million in Q1 2020.

Real growth of the oil sector was -6.63% year on year in Q2 2020. Quarter on quarter, the sector shrank by 10.82% in Q2 2020.

“The Oil sector contributed 8.93% to total real GDP in Q2 2020, down from figures recorded in the corresponding period of 2019 and the preceding quarter, where it contributed 8.98% and 9.50% respectively,” the NBS said.

Nigeria’s non-oil sector tightened by -6.05% in real terms in the review period, the first decline in real non-oil GDP growth rate since Q3 2017.

Read also: IMF downgrades Nigeria’s 2020 GDP growth projection, forecasts 5.4% contraction in economy

The recorded growth rate was -7.70% points weaker relative to that posted during the corresponding quarter of 2019, and -7.60% points compared to Q1 2020.

The non-oil sector output was driven by Financial and Insurance (Financial Institutions), Information and Communication (Telecommunications), Agriculture (Crop Production), and Public Administration, tempering the economy-wide slowdown.

It accounted for 91.07% of aggregate GDP in Q2 2020, a bit higher than the share recorded in Q2 2019 and Q1 2020, which were 91.02% and 90.50% respectively.

The International Monetary Fund has projected Nigeria’s GDP will fall by 5.4% this year but the Nigerian government expects it to shrink by 8.9% in 2020.

Figures released by the NBS earlier this month revealed the nation’s unemployment rate for Q2 2020 stood at 27.1% while inflation rose for the 11th consecutive month in July to 12.82%, its peak in over two years.

Ronald Adamolekun

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Ronald Adamolekun

Ronald Adamolekun is a creative writer with a mixed bag of experience in fields as diverse as data journalism, financial reporting and editing.

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