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GDP expands 2.01%, reflecting a positive start to the year

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Economic growth in Nigeria has recovered slowly in the last two years

MON, MAY 20 2019-theG&BJournal- Latest data published by the National Bureau of Statistics (NBS) shows that Nigeria’s Q1-19 GDP figure expanded positively with real GDP growing by 2.01% y/y.

However, relative to the preceding quarter (fourth quarter of 2018), real GDP growth rate declined by -0.38% points. GDP grew 2.38% y/y in the previous quarter and 1.89% y/y in Q1-2018.

‘’It is worth noting that general elections were held across the country during the first quarter of 2019 and this may have reflected in the strongest first quarter performance observed since 2015,’’ NBS said.

The growth estimate however missed Cordros’ and Bloomberg’s compiled average estimate of 2.61% y/y and 2.54% by 82 bps and 53 bps, respectively.

Aggregate GDP stood at N31,794,085.85 million in nominal terms. This aggregate was higher than in the first quarter of 2018 which recorded N28,438,604.23 million, representing a year on year nominal growth rate of 11.80%.

The aggregate was, however, lower than in the preceding quarter of N35,230,607.63 million, by -9.75%. The nominal GDP growth rate in Q1 2019 was higher than the rate recorded in Q1 2018 by 2.54% points. For further analysis, the Nigerian economy can be classified broadly into the oil and non-oil sectors.

The oil sector declined by 2.40% (compared to -1.62% in Q4-18 and +14.02% in Q1-18). The NBS estimated crude oil production during the three months period to be 1.96mb/d, 0.02mb/d lower than the 1.98mb/d reported in Q1-18, but 0.05mb/d higher than the 1.91mb/d recorded in Q4-18. The sector contributed 9.14% of total GDP (vs. 7.06% and 9.55% in Q4-18 and the corresponding quarter of 2018 respectively) during the review period.

Conversely, output in the non-oil sector expanded, growing by 2.47% y/y in Q1-19, 23 bps lower than the rate recorded in the final quarter of 2018 but 172 bps higher when compared to the growth rate achieved a year ago. The non-oil sector contributed 90.86% to total GDP, (vs. 92.94% and 90.45% in the three months to December 2018 and Q1-18 respectively).

A breakdown of three of the biggest components of the GDP shows that Services grew by 2.41% y/y (vs. 2.90% y/y in Q4-18 and -0.47% y/y in Q1-18). Also, Agriculture grew by 3.17% y/y, 72 bps and 17 bps higher than growth rates recorded in Q4-18 and Q1-18 respectively. Manufacturing (Industries) was largely flat (+0.04% y/y) – 91 bps and 654 bps higher than growth rates recorded in Q4-18 and Q1-18 respectively.

In terms of contribution, services, industries, and agriculture, respectively, accounted for 54.6%, 23.5%, and 21.9% of overall output growth.

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