Nigeria’s GDP growth rate contracted by -1.3% in fourth quarter of 2016

The National Bureau of Statistics on Tuesday released the Gross Domestic Product growth rate for the country with the economy recording a contraction of -1.3 per cent in growth rate in the fourth quarter of 2016.

The NBS in the report explained that in real terms, the economy recorded a decline of N240.8bn from N18.53trn in the fourth of 2015 to N18.29trn in the fourth quarter of 2016.

The negative decline of 1.3 percent, according to the NBS report was less severe than the negative decline of 2.24 percent recorded in the third quarter of 2016.

It reads in part, “In the fourth quarter of 2016, the nation’s Gross Domestic Product contracted by-1.30 percent (year-on-year) in real terms, from N18.53trn in Q4 2015 to N18.29trn.”

The domestic economy slid into recession in the second quarter of 2016 as a slump in crude prices hammered the OPEC member’s public finances. Crude sales make up two-thirds of government revenue.

Fourth-quarter GDP shrank by 1.3 percent, the statistics office said. The oil sector declined by 12.38 percent year-on-year in the quarter.

“This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency,” the office said in a report.

Oil production – Nigeria’s economic mainstay – fell to 1.833 million barrels a day last year after 2.13 million bpd in 2015, it added, blaming militant attacks in the Niger Delta oil hub.

The non-oil sector fell only by 0.33 percent in the fourth quarter, the office said.

“The very shallow contraction in non-oil GDP growth in Q4 2016, raises hope of a more meaningful recovery in non-oil GDP in Q1 2017, buoyed both by improved budget spending and some improvement in FX availability,” said Razia Khan, Chief Economist Africa at Standard Chartered Bank.