Nigeria’s GDP contracted by 2.24% Q3 2016

The nation’s Gross Domestic Product (GDP) contracted by -2.24% (year-on-year) in real terms In the third quarter of 2016. This was lower by 0.18 per cent points from growth recorded in the preceding quarter and also lower by 5.08 per cent points from growth recorded in the corresponding quarter of 2015.

According to just released data by the National Bureau of Statistics (NBS), quarter on quarter (unadjusted for seasonality), real GDP increased by 8.99 per cent during the quarter,   per cent 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 per cent. This growth was higher relative to growth recorded in the third quarter of 2015 by  3.22 per cent points.

During the period under review, oil production according to NNPC, averaged at 1.63 million barrels per day (mbpd), lower from production in second quarter of 2016. Oil production was also lower relative to the cor-responding quarter in 2015 by 0.54million barrels per day when output was recorded at 2.17mbpd.

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.

“This was 0.41 per cent points higher from the second quarter of 2016, yet 3.03 per cent points lower from the corresponding quarter in 2015. In real terms, the Non-Oil sector contributed 91.81 per cent to the nation’s GDP, higher from shares recorded in the second quarter of 2016 (91.74 per cent) and the third quarter of 2015.

As a result, real growth of the oil sector slowed by –22.01 per cent (year-on-year) in third quarter of 2016. This represents a decline relative to growth recorded in same quarter of 2015 at 1.06 per cent Growth declined by 23.07 per cent points and 4.54 per cent points relative to growth in third quarter of 2015 and second quarter of 2016 respectively. Quarter-on-Quarter, growth was 8.07 per cent.

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

The Mining & Quarrying sector grew in the third quarter of 2016 by 5.65 per cent (year on year). This was substantially above growth recorded in the corresponding quarter of 2015 where growth was recorded at –33.43 per cent. This increase is attributable to the high exchange rate of the naira to the dollar in the third quarter of 2016; an average of N303 to $1 compared to the corresponding quarter in 2015 with an average of N197 to $1. The sector contributed 6.23 per cent to overall GDP during the third quarter of 2016, just minimally lower than the contribution recorded in same quarter of 2015 at 6.44 per cent, but higher than its contribution in the preceding quarter of 3.93 per cent.

In real terms, Mining and Quarrying sector slowed by –21.64 per cent (year-on-year) in the third quarter of 2016 which was 22.77 per cent points lower than rates recorded in the same quarter of 2015, also 4.45 per cent points lower than rates recorded in second quarter of 2016.

The contribution of Mining and Quarrying to Real GDP in the third quarter of 2016 stood at 8.34 per cent, showing a decline of 2.06 per cent points relative to the corresponding quarter of 2015 and also a decline of 0.07 per cent points relative to the second quarter of 2016.

Agriculture, made up of four sub-activities of Crop Production, Livestock, Forestry and Fishing in nominal terms, the sector grew by 7.37 per cent year-on-year. This was lower than growth rates recorded in the corresponding quarter of 2015 and also lower than the preceding quarter of 2016 by 1.97 per cent points and 5.87 per cent points respectively.

“Growth in the sector was driven by output in Crop Production accounting for 95 per cent of overall nominal growth of the sector. Agriculture contributed 24.09 per cent to nominal GDP during the quarter under review. This was a little lower than shares recorded in the corresponding period of 2015 but higher than the quarter before at 24.51 per cent and 19.71 per cent respectively.

Real agricultural GDP growth in the third quarter of 2016 stood at 4.54 per cent (year-on-year), an increase of 1.07 per cent points from the corresponding period of 2015. Growth basically remained the same when compared with the previous quarter which was recorded as 4.53 per cent. The contribution of Agriculture to overall GDP in real terms was 28.65 per cent in the quarter under review, higher by 1.86 per cent from its share in the corresponding quarter of 2015, also higher from the second quarter of this year by 6.10 per cent.