The massive drop in global oil prices impacted negatively on the performance of the Nigerian oil and gas sector, which recorded a decline of N3.6tn in output in the 2015 fiscal period, according to punch report.
A report showing the performance of the sector, which was obtained by our correspondent from the National Bureau of Statistics, revealed that in monetary terms, the sector recorded a huge decline of 37.5 per cent from N9.61tn in 2014 to N5.99tn at the end of last year.
Further analysis of the report showed that since the second quarter of the 2014 fiscal year, the petroleum sector had been recording steady decline in output
Between the first and second quarters of 2014, the sector witnessed an increase in output from N2.61tn to N2.63tn.
However, due to the drop in oil prices, which began in June 2014, the sector’s contribution to the economy could not be sustained as it started declining steadily from the third quarter.
It dropped to N2.32tn in the third quarter of 2014 and further went down to N2.04tn in the fourth quarter.
In 2015, the sector witnessed its worst performance in recent times, contributing the sums of N1.39tn, N1.74tn, N1.53tn and N1.31tn to the economy in the four quarters of the year.
The report stated that the dismal performance of the oil and gas sector also impacted negatively on the contribution of the mining and quarrying sector to the economy.
There are four main activities that make up the mining and quarrying sector. They are crude petroleum and natural gas, coal mining, metal ore and other minerals.
The NBS report put the growth in the mining and quarrying sector at 5.18 per cent for the fourth quarter of 2015 as against 8.56 per cent recorded in the corresponding quarter of 2014.
It stated, “On a nominal basis, the sector slowed in the fourth quarter of 2015 by 35.12 per cent (year-on-year) during the quarter.
“This was substantially below the growth recorded in the corresponding quarter of 2014. This drop is attributable to the falling oil prices.”
Speaking on the low output of the sector, financial experts told our correspondent that the inability of the government to effectively diversify the economy away from oil was responsible for the drop in performance.
For instance, a former Managing Director, Unity Bank Plc, Mr. Rislanudeeen Mohammed, said the country should have built enough fiscal buffers when crude oil sold for as high as $140 per barrel.
He said, “Nigeria is a mono product economy basically. We export only crude because 70 per cent of our income is derived from oil; 94 per cent of our foreign earnings is derived from oil, and oil contributes only about 10 per cent of our Gross Domestic Product.
“When the price of oil was going up, when it was in the region of $140, Nigeria was making a lot of money for years. What Nigeria should have done is to build fiscal buffers. But this didn’t happen owing to constitutional challenges.”
Adoption, Utilisation Of ICT Pivotal To Nigeria’s Socio-economic Development – Danbatta
The Information and Communication Technology (ICT) sector is no doubt, one of the fastest-growing sectors of the country’s GDP and is emerging as its most important long-term growth prospect.
The adoption and utilisation of digital revolutions by the government is creating multiplier effects across critical sectors, aiding job creation, better governance, youth empowerment and overall socio-economic development.
Investors King recalls that the sum of N160.59bn was budgeted for the ministry for the year 2022. This is more than the combined N129.59bn allocated to the ministry from 2016 to 2021.
Indeed, for over 10 years, ICT has consistently contributed more than 10 per cent of the Nigeria’s Gross Domestic Product (GDP) – the telecom sector alone contributed 12.45 per cent to GDP as at the fourth quarter of 2020.
In the second quarter of 2021, the ICT sector contributed 17.92 per cent to the real GDP of the nation.
According to the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, in all continents of the world, people, organisations and countries have continued to witness leaps and bounds in economic, social and political activities through the instrumentality of ICT, which has meshed computing, information and communication technology to catalyse development in ways and manners humans never envisaged decades ago.
Danbatta who delivered a paper titled “Empowering the Nigerian Youth though Information and Communication Technology”at the 10th and 11th combined Convocation Lecture of the Fountain University at Osogbo, Osun State recalled the impact of ICT revolution in all parts of human endeavour across countries and continents, insisting that technology will continue to penetrate and foster qualitative and quantifiable changes in all aspects of life.
According to him, Uber, the world’s largest taxi company, owns no vehicle; Airbnb, the world’s largest accommodation provider, owns no real estate; Facebook, world’s most popular public-facing digitally-mediated social networking platform, creates little or no content; Alibaba, a leading global retailer, has little or no inventory, yet they have become signposts of prosperity riding wholly on ICT resources.
These foregoing contextual demonstrations of the possibilities of ICT explain the Federal Government’s policy decisions to strengthen ICT adoption in building a robust digital economy in Nigeria, eloquently expressed in the National Digital Economy Policy and Strategy (NDEPS), 2020-2030; the Nigerian National Broadband Plan (NNBP), 2020-2025 and other series of policies, guidelines and regulations derivative of the NDEPS and NNBP.
ICT, Agric, Others To Drive Economic Growth In Nigeria In 2022 – Bismarck Rewane
Chief Executive Officer, Financial Derivatives, Bismarck Rewane has listed ICT, Financial Services, Transport, Construction, Manufacturing, Trade and Agriculture as sectors that are expected to drive economic growth in 2022.
Disclosing this during the Nigerian-British Chamber of Commerce January Breakfast Meeting themed ‘2022 Economic Outlook’, Rewane noted that this projection is based on the success and high level of productivity in these key sectors.
He further noted that economic activity in 2022 will be similar to 2021, owing to global inflationary trends linked to COVID-19.
He however projected that the country’s inflation rate was expected to remain structurally high with a full-year average of 13.3 percent. According to him, the development would be driven by cost-push factors such as fuel subsidy removal, electricity tariff and taxation.
He further stressed that Nigerians will be richer in 2022 as the country’s Gross Domestic Product (GDP) rate would be revised upwards to 2.8 percent from its current 2.1 percent based on improvements in the services and manufacturing sector.
“We can expect to see sustained cost-push factors, including a planned fuel subsidy removal, new electricity tariffs and additional taxes; alongside legacy issues, such as increased debt service burden and exchange rate conversion. Inflation will remain structurally high at an average of 13.3 percent, with an increase in Q1 and Q2”, he noted.
While also noting that there has been a 90 percent surge in electronic payment, e-commerce, digitalisation and technology, Rewane projected that competition between traditional banks and Fintechs will intensify, while banks with constant innovation and regional diversification will remain resilient.
Recall that Investors king had previously reported that Stanbic IBTC Holdings Plc announced plans to seek regulatory approval for the establishment of a Fintech subsidiary. The new financial services unit which will be called Stanbic IBTC Financial Services Limited will operate as a Payment Solution Service Provider (PSSP) upon regulatory approvals, including licensing by the Central Bank of Nigeria.
This development from Stanbic IBTC came a few days after Standard Chartered Bank announced it was shutting down 50 percent of its Nigerian branches in a move to digitalise operations and reduce operating costs.
The Nigerian-British Chamber of Commerce is the foremost bilateral Chamber in Nigeria and was established in 1977 to promote Trade and Investment between Nigeria and Britain.
Oil Price Hike, Service Sector to Grow Nigeria’s Economy by 2.5% in 2022 – Report
In its latest Global Economic Prospects report, the World Bank has predicted that Nigeria’s economy will grow at a 2.5 percent rate in 2022 and 2.8 percent in 2023, largely due to the expected increase in oil prices and the country’s growing services sector in 2022 and beyond.
The projection was after oil prices rose over tightening supplies and rising global demand for the commodity. It should be recalled that Investors King reported that Libya’s crude oil production dropped from 1.3 million barrels per day (bpd) to 729,000 bpd, while oil production in Kazakhstan, another oil producer with an output of 1.6 million bpd, has drastically reduced as the nation faces unrest and natural disaster.
The new growth projection for Africa’s largest economy was slightly higher than the 2.4 percent previously predicted for the country in 2021.
“In Nigeria, growth is projected to strengthen somewhat to 2.5 per cent in 2022 and 2.8 per cent in 2023. The oil sector should benefit from higher oil prices, a gradual easing of the Organisation of the Petroleum Exporting Countries production cuts, and domestic regulatory reforms. Activity in service sectors is expected to firm as well, particularly in telecommunications and financial services,” the Washington-based institution states.
The World Bank however had pointed out that the recovery from pandemic-induced income, employment losses, and inflation of food prices would be slow. It predicted that other factors such as insecurity, social unrest, emerging COVID-19 threats such as the Omicron variant will restrain the non-oil economy of Nigeria.
“Activity in the non-oil economy will remain curbed by high levels of violence and social unrest, as well as the threat of fresh COVID-19 flare-ups with remaining mobility restrictions being lifted guardedly because of low vaccination rates — just about 2 per cent of the population, had been fully vaccinated by the end of 2021,” the report stated.
“After barely increasing last year, per capita incomes are projected to recover only at a subdued pace, rising 1.1 per cent a year in 2022-23, leaving them almost 2 per cent below 2019 levels.
“In South Africa and Nigeria, per capita incomes are projected to remain more than 3 per cent below pre-pandemic levels in 2023,” the World Bank added, after projecting that the global growth is expected to decelerate from 5.5 per cent in 2021 to 4.1 per cent in 2022, then 3.2 per cent in 2023.
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