Nigeria’s economy contracted by 2.24% in Q3

The National Bureau of Statistics (NBS) on Monday released a report showing that the nation’s economy contracted by 2.24% year on year in the third quarter of 2016 as the effect of economic recession bites harder on economy.

The NBS report, tagged Nigeria Gross Domestic product report Quarter 3 comes as the meeting of CBN Monetary Policy Committee starts in Abuja. The meeting is expected to take decision on interest rate. Economic analysts expect the Central Bank to hold benchmark rates at 14 percent, given that inflation has hit 18.3 percent in October.

According to the NBS report, the economy contracted by 0.18% points from growth recorded in the preceding quarter and also lower by 5.08% points from growth recorded in the corresponding quarter of 2015. It said Quarter on quarter (unadjusted for seasonality), real GDP increased by 8.99%.

During the quarter, aggregate GDP stood at N26,558,952.83 million (in nominal terms) at basic prices. Compared to the third quarter 2015 value of N24,313,636.94 million. Nominal GDP grew by 9.23%. This growth was higher relative to growth recorded in the third quarter of 2015 by 3.22% points.

The NBS said oil production fell to 1.63 million barrels per day, down from 1.69 million in the second quarter. However, the non-oil sector grew by 0.03 percent in the third quarter, compared with negative growth in the first two, it said.

As a share of the economy, the Oil sector contributed 8.19% of total real GDP, down from figures recorded in the corresponding period of 2015 and the preceding quarter of 2016 recorded at 10.27% and 8.26% respectively.

The Non -Oil sector contributed 91.81% to the nation’s GDP, higher from shares recorded in the second quarter of 2016 (91.74%) and the third quarter of 2015. Growth in the Non-oil sector was largely driven by the activities of Agriculture (Crop Production), Information & Communication and Other Services. The non-oil sector grew by 0.03% in real terms in the third quarter of 2016, reversing the last 2 quarters of negative growth recorded in Q1 and Q2 2016.

With the scary report from the NBS, the argument that Nigeria’s way out of the recession seems to be long way ahead cannot be debated, according to some analysts.

Continued low price of crude oil globally, coupled with attacks on major oil pipelines by militants in the Niger Delta has continued to haunt Nigeria’s revenue. The country could not meet up with the 2.2mbpd upon which the 2016 budget was calculated and this always takes its toll on the economy.