Nigeria GDP witnessed a 6.1 percent decline in Q2 in real terms, latest data from the National Bureau of Statistics (NBS) reveals. Consequently, for the first half of 2020, real GDP declined by 2.18% year-on-year, compared with 2.11% growth recorded in the first half of 2019. Furthermore, only 13 activities recorded positive real growth compared to 30 in the preceding quarter.
NBS attributes the decline to significantly lower levels of both domestic and international economic activity during the second quarter. The nationwide lockdown imposed during the quarter worsened the demand outlook.
NBS says that domestic demand plummeted due to closure of schools and markets, ban on domestic travel, restrictions of human and vehicular movements implemented in a few states and the nationwide curfew.
When compared with Q2 2019, which recorded a growth of 2.12%, the Q2 2020 growth rate indicates a drop of –8.22% points, and a fall of –7.97% points when compared to the first quarter of 2020 (1.87%). Quarter on quarter, real GDP decreased by –5.04%.
Oil Sector
The oil sector witnessed a decline in the second quarter of 2020 with the average daily oil production hitting 1.81 million barrels per day (mbpd) which was lower than the daily average production of 2.02mbpd recorded in the same quarter of 2019, and lower than the first quarter 2020 production volume of 2.07mbp
Looming recession
NBS says that the decline in GDP year on year threatens to push the nation into a recession. The latest data surpasses IMF and World Bank forecasts for GDP contraction in 2020. The non-oil sector declined by –6.05% in real terms during the reference quarter (Q2 2020). It was the first decline in real non-oil GDP growth rate since Q3 2017. Sectors which experienced the highest negative growth included Transport and Storage, Accommodation and Food Services, Construction, Education, Real estate and Trade.
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.
Growing telecoms sector
However, the telecommunications sector defied the slow economic activity to record double digit growth in the second quarter. In this case, the sector grew 18.1 percent in real terms buoyed by increased demand for data usage and growth in number of mobile subscribers.
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