Nigeria’s Gross Domestic Product (GDP) growth rate dropped to 1.94 per cent (year on year) in real terms in the second quarter of the year (Q2 2019) compared to 2.10 per cent in the preceding quarter, according to the National Bureau of Statistics (NBS).
This represented a –0.16 percentage point contraction of the economy.
According the GDP Report for Q2 2019, which was released by the statistical agency Tuesday, compared to the corresponding quarter of 2018 (Q2 2018), which recorded a growth of 1.50 per cent, the growth observed in Q2 2019 indicates an increase of 0.44 per percentage points.
While the oil sector accounted for 8.82 per cent of growth in Q2, the non-oil sector contributed 91.18 per cent to GDP.
Daily oil production also dropped to 1.98 million barrels per day (mbpd) compared to 1.99 mbpd in the preceding quarter.
The NBS said during the quarter, aggregate GDP stood at N34.94tn in nominal terms, an increase of 13.83 per cent over the performance in the second quarter of 2018 and 9.8 per cent over the preceding quarter.
It said, “The performance observed in Q2 2019 follows an equally strong quarter performance, and was likely aided by stability in oil output as well as the successful political transition.
“Overall, a total of 15 activities grew faster in Q2 2019 relative to last year, while 13 activities had higher growth rates relative to the preceding quarter. On a half-year basis, real growth in the first half of 2019 stood at 2.02 per cent, higher than in 2018 which was 1.69 per cent. Quarter on quarter, real GDP increased by 2.85 per cent compared to a decline of 13.69 per cent in the preceding period.”
A global credit rating agency, Fitch Ratings, said in June that the Nigerian economy would continue to experience a sluggish recovery, predicting that the GDP growth would average 2.2 per cent in 2019-2020, below its previous 10-year average of 4.2 per cent and the current ‘B’ median of 3.4 per cent.
It said high unemployment and inflation would constrain private consumption while investment was held back by tight credit supply, a weak business climate and regulatory uncertainty in the oil sector.
Another rating agency, Moody’s Investors Service, also said in June that Nigeria was trapped in a low growth path for the time being.
The Vice President – Senior Credit Officer, Sovereign, Aurelien Mali, said government revenue weakness remained a key credit challenge, adding that the country’s balance sheet had deteriorated to a worrisome level.