Nigeria Exceeds GDP Growth Projection for 2019

A commercial tricycle operator operating along Tafawa Balewa Square in Lagos Nigeria (file photo).
24 February 2020

The quarterly report released by the National Bureau Statistics, NBS on Monday indicates that Nigeria exceeded its GDP projection for 2019 fiscal year.

According to the report, the Nigeria's annual 2019 real GDP growth rate stood at 2.27%, compared to 2.3% estimated for the year and marginally higher than 1.9% in 2018.

With fiscal revenues below 7% of GDP, increased public spending widened the deficit, financed mainly by borrowing.

At the end of June 2019, total public debt was $83.9 billion, 14.6% higher than the year before.

But Quarter on quarter, real GDP growth was 5.59%.

However, the Bureau said that Nigeria Gross Domestic Product (GDP) grew by 2.55% (year-on-year) in real terms in the fourth quarter of 2019.

The grow according to NBS, represents an increase of 0.17% points and an increase of 0.27% points when compared with the third quarter of 2019, when compared to the fourth quarter of 2018 which recorded a growth rate of 2.38%.

The strong fourth quarter 2019 growth rate also represented the highest quarterly growth performance since the 2016economic recession.

In Q4 2019, aggregate GDP stood at N39,577,340.04 million in nominal terms. This was higher than the fourth quarter of 2018 which recorded an aggregate of N35,230,607.63 million, representing year on year nominal growth rate of 12.34%.

This rate was -0.31% points lower relative to the rate recorded in the fourth quarter of 2018 and -0.96% points lower than the rate recorded in the preceding quarter. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors

The oil sector

During the fourth quarter under review, average daily oil production of 2.00 million barrels per day (mbpd) was recorded, indicating a rise of 0.09mbpd over the daily average production of 1.91 mbpd recorded in the same quarter of 2018.

However, it was -0.04mbpd lower than the production volume of 2.04mbpd recorded in the third quarter of 2019. Nevertheless, it is notable that oil production remained consistently at or above 2.0mbpd all through 2019.

Real growth of the oil sector was 6.36% (year-on-year) in Q4 2019 indicating, an increase of 7.98% points relative to the rate recorded in the corresponding quarter of 2018. Growth decreased by -0.13% points when compared to Q3 2019 which was 6.49%.

On Quarter-on-Quarter, the oil sector recorded a growth rate of -20.87% in Q4 2019.

On an annual basis, oil recorded 4.59% growth in 2019, higher compared to 0.97% recorded in 2018. The Oil sector contributed 7.32% to total real GDP in Q4 2019, up from figures recorded in the corresponding period of 2018 but down compared to the preceding quarter, where it contributed 7.06% and 9.77% respectively. Oil contributed 8.78% to real GDP in 2019.

The Non-Oil Sector

The non-oil sector grew by 2.26% in real terms during the reference quarter (Q4 2019).

This was lower by -0.44% points compared to the rate recorded in the same quarter of 2018 but 0.42% point higher than the third quarter of 2019.

This sector was driven, during the fourth quarter of 2019, mainly by Information and Communication (Telecommunications), Agriculture (Crop Production), Financial and Insurance Services (Financial Institutions), and Manufacturing.

In real terms, the Non-Oil sector contributed 92.68% to the nation's GDP in the fourth quarter of 2019, lower from shares recorded in the fourth quarter of 2018 (92.94%) but higher than the third quarter of 2019 (90.23%). The annual contribution of the non-Oil sector stood at 91.22% in 2019.

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