Home Business COVID-19 hit Nigerian economy shrinks 6.10% year-on-year in Q2 2020

COVID-19 hit Nigerian economy shrinks 6.10% year-on-year in Q2 2020

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The sector contributed 8.93% of total GDP (vs. 8.98% Q2-19) during the review period.

By Audrey Lotechukwu

MON, AUG 24 2020-theG&BJournal– Nigeria’s Gross Domestic Product (GDP) growth rate shrank by 6.10% (year-on-year) in real terms in the second quarter of 2020, attributed majorly to the nationwide shutdown aimed at containing the COVID-19 pandemic.

The National Bureau of Statistics (NBS) released the growth figures today which signalled that growth is already significantly slowing in line with the IMF projections for countries most hit with the coronavirus pandemic, but outperformed analysts estimate of -2.87% y/y, owing to a negative surprise from non-oil GDP.

The latest data shows growth rate dropped -8.22% points when compared with Q2 2019, and a fall of -7.97% points when compared to the first quarter of 2020 (1.87%).

Aggregate GDP stood at N34,023,197.60 million in nominal terms, or -2.8% lower than the second quarter of 2019 which recorded an aggregate of N35,001,877.95 million.

According to the NBS, the nominal growth rate overall was -16.81% points lower than recorded in the second quarter of 2019, and -14.81% points lower than recorded in the first quarter of 2020.

The breakdown of the GDP figure showed that the oil sector plunged significantly, contracting by 6.63% y/y (compared to growth of 7.17% y/y in Q2-19).

The NBS estimated crude oil production during the three months to be 1.81mb/d, 10.4% y/y lower relative to Q2-19. The sector contributed 8.93% of total GDP (vs. 8.98% Q2-19) during the review period.

Conversely, output in the non-oil sector recorded a 6.05% y/y decline in Q2-20 (compared to growth of 1.64% in Q2-19), the first decline in real non-oil GDP growth rate since Q3-17. The non-oil sector contributed 91.07% to total GDP, (vs. 91.02% and 90.50% in Q2-19 and Q1-20, respectively).

The non-oil sector output was driven by Financial and Insurance (Financial Institutions), Information and Communication (Telecommunications), Agriculture (Crop Production), and Public Administration, moderating the economy-wide decline.

The sectors which experienced the highest negative growth included Transport and Storage, Accommodation and Food Services, Construction, Education, Real estate and Trade among others.

Analysing the breakdown of three of the biggest components of the GDP: Agriculture grew by 1.58% y/y (vs. 2.20% y/y in Q1-20); Industries contracted by 12.05% y/y, (vs. 2.26% growth y/y in Q1-20); while Services declined by 6.78% (vs. 1.57% growth y/y in Q1-20).

In terms of contribution, services, agriculture, and industries, respectively, accounted for 53.49%, 24.65%, and 21.87% of overall output growth.

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