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Latest NBS’s report on economy shows snail speed recovery, real sector weakest

More indications that the Nigerian economy is still in need of serious policy actions for fast recovery have been revealed by the latest report of the National Bureau of Statistics (NBS).

Otherwise, though the just released Nigeria’s Q4-2017 GDP figure, shows that the domestic economy expanded for the third consecutive quarter, with real GDP growing by 1.92% y/y (vs. 1.40% y/y in the previous quarter and -1.73% y/y in Q4-2016), the impacts of the slow growth is yet to be felt in real terms.

The growth estimate came in 8 bps and 34 bps lower than Bloomberg’s compiled average estimate of 2.0% and Cordros forecast of 2.26%. For the full year, real GDP was 0.83% in 2017, compared to -1.58% in 2016.

However, a quick look at the breakdown of the GDP figure shows that the oil sector grew by 8.38% (compared to 25.89% in Q3-2017 and -17.70% in Q4-2016). The NBS estimated crude oil production during the three months period to be 1.91mb/d, 0.12mb/d lower than the 2.03mb/d reported in Q3-17, but marginally ahead of the 1.90mb/d achieved in Q4-2016.

Compared to Q3-17, the oil sector contracted by 25.52%, contributing 7.17% of total GDP (vs. 6.75% and 10.04% in the corresponding quarter of 2016 and Q3-17 respectively) during the review period. Overall, in 2017, the oil sector grew by 4.79% (vs. -14.45% in 2016).

Besides, output in the non-oil sector expanded, growing by 1.45% y/y in Q4-2017, 178 bps and 221 bps higher than the rates recorded in the corresponding quarter of 2016 and in the previous quarter respectively. The non-Oil sector contributed 92.83% to total GDP, (vs. 93.25% and 89.96% in the corresponding quarter of 2016 and Q3-17 respectively). For 2017FY, non-oil GDP was 0.47%, vs. -0.22% in 2016.

Further breakdown of three of the biggest components of the GDP shows that services grew by 0.10% y/y (vs. -2.66% y/y in Q3-17 and -1.52% y/y in Q4-16). Also, agriculture grew by 4.23% y/y (vs. 3.06% y/y in Q3-2017 and 4.03% in Q4-16) while manufacturing grew by 0.14% y/y – compared to -2.85% in Q3-17 and -2.54% in Q4-16.

In terms of contribution, services, agriculture, and industries, respectively, accounted for 53.45%, 26.18%, and 20.38% of overall output growth.

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