- NBS: Govt, Household Expenditures Responsible for GDP Decline in Q3, Q4 2016
The National Bureau of Statistics (NBS) has stated that both household consumption and government consumption expenditures contributed to the fall in Gross Domestic Product (GDP) in the third and fourth quarters of 2016.
In a report titled: ‘National Gross and Domestic Product Report (Expenditure and Income Approach) for the third and fourth quarters of 2016’, the NBS also said year-on- year, growth in GDP declined by 2.34 per cent in the third quarter of the same year.
The country’s GDP contracted by 1.73 per cent in real terms, a situation the NBS said, resulted in continuation of the negative growth trend from the first half of 2016.
The NBS noted that a strong recovery in growth in net exports, particularly in the fourth quarter, helped to stem the decline.
Both household consumption and government consumption expenditures contributed to the fall in Gross Domestic Product (GDP) in the third and fourth quarters of 2016.
National Disposable Income also recorded a strong growth in comparison to the GDP in the second half of 2016 in real terms.
According to the NBS, “This is partly as a result of increases in ‘other net transfers from the rest of the world.”
Growth in domestic Compensation of Employees year-on-year declined in real terms, the report said, adding that operating surplus also declined in the third and fourth quarters but grew overall in real terms in 2016.
“In real terms, year-on-year, growth in GDP declined by 2.34 per cent and 1.73 per cent, in the third and fourth quarter respectively, continuing the negative growth trend from the first half of 2016.
“Both household consumption and government consumption expenditures contributed to the fall in the third and fourth quarters, however a strong recovery in growth in net exports, particularly in the fourth quarter helped to stem the decline.
“National Disposable Income recorded a strong growth in comparison to the GDP in the second half of 2016 in real terms.
“This is partly as a result of increases in “other net transfers from the rest of the world,” the report said.
According to the NBS, year-on-year growth, “domestic compensation of employees declined in real terms. Operating surplus declined in the third and fourth quarters but grew overall in real terms in 2016.
GDP is the value of all goods and services available for final use and export.
The country’s economy slipped into recession in 2016 after contracting for two consecutive quarters.
However, on September 5, the NBS announced that the economy had exited recession, growing by 0.55 per cent in real terms.
Crude Oil Dips Slightly on Friday Amid Demand Concerns
On Friday, global crude oil prices experienced a slight dip, primarily attributed to mounting concerns surrounding demand despite signs of a tightening market.
Brent crude prices edged lower, nearing $83 per barrel, following a recent uptick of 1.6% over two consecutive sessions.
Similarly, West Texas Intermediate (WTI) crude hovered around $78 per barrel. Despite the dip, market indicators suggest a relatively robust market, with US crude inventories expanding less than anticipated in the previous week.
The oil market finds itself amidst a complex dynamic, balancing optimistic signals such as reduced OPEC+ output and heightened tensions in the Middle East against persistent worries about Chinese demand, particularly as the nation grapples with economic challenges.
This delicate equilibrium has led oil futures to mirror the oscillations of broader stock markets, underscoring the interconnectedness of global economic factors.
Analysts, including Michael Tran from RBC Capital Markets LLC, highlight the recurring theme of robust oil demand juxtaposed with concerning Chinese macroeconomic data, contributing to market volatility.
Also, recent attacks on commercial shipping in the Red Sea by Houthi militants have added a risk premium to oil futures, reflecting geopolitical uncertainties beyond immediate demand-supply dynamics.
While US crude inventories saw a slight rise, they remain below seasonal averages, indicating some resilience in the market despite prevailing uncertainties.
Nigeria’s Petrol Imports Decrease by 1 Billion Litres Following Subsidy Removal
Nigeria’s monthly petrol imports declined by approximately 1 billion litres following the fuel subsidy removal by President Bola Ahmed Tinubu, the National Bureau of Statistics (NBS) reported.
The NBS findings illuminate the tangible effects of this policy shift on the country’s petroleum importation dynamics.
Prior to the subsidy removal, the NBS report delineated a consistent pattern of petrol imports with quantities ranging between 1.91 billion and 2.29 billion litres from March to May 2023.
However, in the aftermath of Tinubu’s decision, the nation witnessed a notable downturn in petrol imports, with figures plummeting to 1.64 billion litres in June, the first post-subsidy month.
This downward trend persisted in subsequent months, with July recording a further reduction to 1.45 billion litres and August witnessing a significant decline to 1.09 billion litres.
August’s import figures represented a decrease of over 1 billion litres compared to the corresponding period in 2022.
The NBS report underscores the pivotal role of the subsidy removal in reshaping Nigeria’s petrol import landscape with the Nigerian National Petroleum Company emerging as the sole importer of fuel in the current scenario.
Despite higher petrol imports in the first half of 2023 compared to the previous year, the decline in June, July, and August underscores the profound impact of subsidy removal on import dynamics, affirming the NBS’s latest findings.
Nigeria’s Oil Rig Count Soars From 11 to 30, Says NUPRC CEO
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced a surge in the country’s oil rig count.
Komolafe disclosed that Nigeria’s oil rigs have escalated from 11 to 30, a substantial increase since 2011.
Attributing this surge to concerted efforts by NUPRC and other governmental stakeholders, Komolafe highlighted the importance of instilling confidence, certainty, and predictability in the oil and gas industry.
He explained the pivotal role of the recently implemented Petroleum Industry Act (PIA), which has spurred significant capital expenditure amounting to billions of dollars over the past two and a half years.
Speaking in Lagos after receiving The Sun Award, Komolafe underscored the effective discharge of NUPRC’s statutory mandate, which has contributed to the success stories witnessed in the sector.
The surge in Nigeria’s oil rig count signifies a tangible measure of vibrant activities within the upstream oil and gas sector, reflecting increased drilling activity and heightened industry dynamism.
Also, Komolafe noted that NUPRC has issued over 17 regulations aimed at enhancing certainty and predictability in industry operations, aligning with the objectives outlined in the PIA.
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