Nigeria enters worst recession in decades

Marco Green
November 22, 2020

The oil sector contracted by 13.89 percent in the third quarter against growth of 6.49 percent in the same period a year earlier, according to data cited by Kale, while non-oil sectors shrank by 2.51 percent in the three months to September.

'The NBS Q3 real GDP number is a confirmation of the fact that in terms of economic contraction occasioned by COVID'19, Q2 2020 represents the worst experience for Nigeria.

The National Bureau of Statistics (NBS) released the figures on Saturday.

Nigeria's economy went into a recession in 2016 following a lull in economic activities as a result of the delay in the appointment of ministers and other key appointees upon take over of the reins of government in 2015 President Buhari. As these restrictions were lifted, businesses re-opened and worldwide travel and trading activities resumed.

The contribution of finance and insurance to real GDP reached 2.67 percent, higher than the contribution of 2.49 percent recorded in the third quarter of 2019.

For the oil sector, it said that the average daily oil production recorded in the third quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpd lower than the average production recorded in the same quarter of 2019 and 0.14mbpd lower than production volume recorded in the second quarter of 2020. Nigeria cut oil production to meet OPEC+ compliance.

For the first time in more than three years, the Nigerian economy shrank in the second quarter of this year as the GDP fell by 6.10 per cent, compared with a growth of 1.87 per cent in Q1.

It said the contraction in Q2 brought to an end the three-year trend of low but positive real growth rates recorded since the 2016/17 recession.

"Q3 2020 Real GDP contracted for second consecutive quarter by -3.62%", Yemi Kale, the statistician general, said on Twitter.

The construction sector grew by 2.84 percent in Q3 2020 from a contraction of 31.77 percent in Q2 2020 and 2.37 percent in Q3 2019.

"Cumulative GDP for the first 9 months of 2020 therefore stood at -2.48 percent", it added.

"Net oil and gas revenue and influx to the federation account in the first quarter of 2020 amounted to N940.91billion".

"For clarity, the Nigerian economy has been broadly classified into the oil and non-oil sectors:The contract mark the beginning of a full-blown recession and second consecutive contraction from -6.10 per cent recorded in the previous quarter of this year".

Industry real GDP contracted by -6.12 per cent compared to -12.05 per cent in Q2 2020 and 3.21 per cent in Q3 2019.

In real terms, the non-oil sector contributed 91.27 percent to the nation's GDP in the third quarter, higher than its share in the third quarter of 2019 (90.23 percent) and Q2 (91.07 percent).

The manufacturing sector contracted by -1.51 per cent in Q3 2020 from -8.78 per cent in Q2 2020 and 1.1 per cent in Q3 2019.

Agricultural sector grew by 1.39 per cent compared to 1.58 per cent in Q2 2020 & 2.28 per cent in Q3 2019.

The information and communication sector grew by 14.56 percent in Q3 from 16.52 percent in Q2 2020 and 9.88 percent in Q3 2019, driven by a 17.36 percent growth in telecommunications and information services.

Quarter on quarter growth of the sector was recorded at 32.13 per cent, the report said.

Other reports by Click Lancashire

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