Fourth Quarter GDP Growth Fails To Excite Stakeholders

Despite the growth of 2.55% in real terms year on year in Nigeria’s Gross Domestic Product (GDP) in 2019, most analysts are not excited by the highest growth since the 2016 recession.

The fast dwindling Excess Crude Account, Foreign reserves and spiraling inflation have continued to dampen their spirits.

The analysts who preferred anonymity said the lack of economic agenda and direction and occasional policies, like the closure of borders and a large chunk of foreign exchange expended on defending the naira for an import-dependent economy leave much to be desired.

However, the National Bureau of Statistics reports that GDP of the country grew by 2.55% (year-on-year) in real terms in the fourth quarter of 2019.

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

The growth rate represented the highest quarterly growth performance since the 2016 recession.

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Overall, this resulted in an annual 2019 real growth rate of 2.27%, compared to 1.91% in 2018. Quarter on quarter, real GDP growth was 5.59%.

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.

Contribution of the oil sector to GDP
During the fourth quarter of 2019, 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.The NBS noted that nevertheless, oil production remained consistently at or above 2.0mbpd all through 2019.

According to the data released by NBS, the 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%. 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.

Contribution of the non-oil sector to GDP

The non-oil sector, according to the NBS, 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.