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Nigeria’s Economy Sustains Growth, Expands By 1.81% in Q3

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  • Nigeria’s Economy Sustains Growth, Expands By 1.81% in Q3

Nigeria’s economy sustained growth in the third quarter of 2018 despite growing uncertainty ahead of the national election.

The economy grew at 1.81 percent year-on-year in the third quarter, according to the National Bureau of Statistics report released on Monday. The Gross Domestic Product was 0.64 percent higher than the 1.17 percent recorded in the same quarter of 2017 and 0.31 percent better than the 1.50 percent growth rate filed in the second quarter of 2018.

The aggregate GDP rose from N29,377,674.03 million in nominal terms in Q3 2017 to N33,368,049.14 million in Q3 2018, representing a 13.58 percent increase in growth.

Oil Sector

The oil sector of Africa’s largest economy contracted by 2.91 percent year-on-year in Q3 2018, that is a 25.94 percent points lower than the corresponding quarter of 2017. However, growth increased by 1.04 percent points when compared to the -3.95 percent recorded in the second quarter of 2018.

On a quarterly basis, the oil sector grew at 19.64 percent rate in the third quarter. Partly due to the surge in global oil prices and moderate crude oil output. National average daily oil production stood at 1.94 million barrels per day during the quarter, higher than the 1.84mbpd achieved in Q2 2018 and lower than 2.02mbpd recorded in the same quarter of 2017.

The oil sector contributed 9.38 percent to the national GDP in Q3 2018, down from Q3 2017 and up when compared to Q2 2018, where the sector contributed 9.84 percent and 8.55 percent, respectively.

Non-Oil Sector

The largest sector of the economy, the non-oil sector expanded by 2.32 percent during the quarter under reviewed. Higher by 3.08 percent point when compared to the rate filed in the same quarter of 2017 and 0.28 percent better than the second quarter of 2018.

The sector was driven mainly by Information and communication; other drivers were
Agriculture, Manufacturing, Trade, Transportation and Storage and Professional, Scientific and Technical Services. In real terms, the Non-Oil sector contributed 90.62 percent to the total GDP, higher than the 90.16 percent contributed in the third quarter of 2017 and lower than the second quarter of 2018 recorded as 91.45 percent.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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UN Chief Welcomes Historic’ IMF Liquidity Boost for Governments in Need

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As the COVID-19 crisis continues to exacerbate restrictions on government spending throughout the world, the UN chief on Tuesday welcomed the decision by the International Monetary Fund (IMF) to approve a $650 billion allocation of Special Drawing Rights to “boost liquidity”.

Secretary-General António Guterres issued a statement on the policy change towards Special Drawing Rights or SDRs, a type of foreign reserve asset that is IMF defined and maintained, as additional funding that could help to pay down debts.

He also underscored that economies not in need of access to cash should “consider channeling these resources to vulnerable low and middle-income countries that need a liquidity injection by replenishing the IMF’s Poverty Reduction and Growth Trust Fund”.

‘Historic decision’

Yesterday’s IMF’s allocation makes new borrowing available to the fund’s 190 member countries, roughly in proportion to their share of the global economy.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis”, said IMF Managing Director Kristalina Georgieva.

“The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.”

Halting debt default

The Secretary-General stressed that it is also “critical to quickly establish the proposed Resilience and Sustainability Trust at the IMF…[for] a comprehensive response and recovery, including providing more support for vaccinations and debt management and to support the efforts of developing economies in restructuring for inclusive growth”.

Last month, he urged the world’s largest economies to spearhead a global COVID-19 vaccination plan and expand debt relief to developing countries battered by the pandemic.

Bulwark against default

He also advised supporting a new $50 billion IMF investment roadmap aimed at ending the pandemic and driving a fast recovery.

As many developing countries are “teetering on the verge of debt default”, the UN chief encouraged the G20 leading industrialized nations to channel unused SDRs to the Fund’s new resilience and sustainability plan, for these nations.

“Special Drawing Rights also need to be considered as additional funding, not deducted from Official Development Assistance”, he reminded.

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IMF Approves Largest SDR Allocation In History to Boost Global Liquidity

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The Board of Governors of the International Monetary Fund (IMF) has approved a general allocation of Special Drawing Rights (SDRs) equivalent to US$650 billion (about SDR 456 billion) on August 2, 2021, to boost global liquidity.

“This is a historic decision – the largest SDR allocation in the history of the IMF and a shot in the arm for the global economy at a time of unprecedented crisis. The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy. It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis,” IMF Managing Director Kristalina Georgieva said.

The general allocation of SDRs will become effective on August 23, 2021. The newly created SDRs will be credited to IMF member countries in proportion to their existing quotas in the Fund.

According to the IMF, about US$275 billion (about SDR 193 billion) of the new allocation will go to emerging markets and developing countries, including low-income countries.

“We will also continue to engage actively with our membership to identify viable options for voluntary channeling of SDRs from wealthier to poorer and more vulnerable member countries to support their pandemic recovery and achieve resilient and sustainable growth”, Ms. Georgieva said.

One key option is for members that have strong external positions to voluntarily channel part of their SDRs to scale up lending for low-income countries through the IMF’s Poverty Reduction and Growth Trust (PRGT). Concessional support through the PRGT is currently interest-free.

The IMF is also exploring other options to help poorer and more vulnerable countries in their recovery efforts. A new Resilience and Sustainability Trust could be considered to facilitate more resilient and sustainable growth in the medium term.

In April last year, Nigeria collected $3.4 billion—equivalent to 100 percent of its quota— under the IMF’s Rapid Financing Instrument, RFI, to tackle the funding gaps created by COVID-19, especially when the crude oil market stagnated.

The financial support, approved by the IMF Executive Board on April 28, 2020, provided critical support to shore up Nigeria’s healthcare sector and shielded jobs and businesses from the shock of the COVID-19 crisis while helping to limit the decline in the nation’s external reserves.

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ECOWAS@46: Commission Seeks Trade Partnership With OPS To Deepen Intra-African Trade

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The Economic Community of West African States (ECOWAS) in commemoration of its 46th anniversary has sought partnership with the Organised Private Sector (OPS) to deepen intra-African trade and lift millions out of poverty.

This was revealed yesterday by the president of the ECOWAS Commission, Mr. Jean-Claude Brou, at a webinar organised in collaboration with the Lagos Chamber of Commerce and Industry (LCCI) yesterday.

The theme of the webinar is “Optimising Sustainable Trade, Investment and Regional Economic Integration through Effective Partnership between ECOWAS Institutions and the Organised Private Sector”.

Jean-Claude, represented by Mr. Kolawole Sopola, Acting Director, Trade, ECOWAS, said the commission, in recognition of the private sector’s role, created a stronger framework to boost the sector’s capacity for enhanced trade.

He said that the commission had also adopted more than 100 regional standards with 70 others under development on some products.

Brou listed mango, cassava, textile and garments as well as information and communication technology among such products.

“The growing importance of informal trade compels the ECOWAS to create a framework expected to engender more availability and reliability of up to date information on informal trade.

“The framework also seeks to implement reform that is essential to eliminate obstacles to informal trade among others.

“It is important to improve investment, particularly, private investment, in all sectors and I stress that digitalization must be at the center of activities for economic recovery.

“Infrastructural deficit must be addressed as well as sustainable and cheaper energy for the competitiveness of products.”

“The commission is developing projects on roads, renewable energy and education, needed for private sector development; all these to lift millions in the sub-region out of poverty,” he said.

Dr. George Donkor, President of, ECOWAS Bank for Investment and Development (EBID) said that many western states showed numerous hurdles to overcome as countries continue to export raw materials, therefore maintaining low levels of development.

Donkor, however, said that reforms were already underway to accelerate the capacities of the Micro, Small and Medium Enterprises (MSME) to spur private sector development for intra-African trade.

He noted that the EBID 2025 strategy was aimed at ensuring that the private sector benefitted up to 65 percent of the $1.6 billion available facilities.

“A vibrant private sector is key in driving regional integration and securing its active participation and has the potential to create a win-win situation for all participants.

“Increasing credit to the private sector will enhance capacity and the EBID is ready with strategies to ensure that the sector’s capacity is boosted,” he said.

Also, Otunba Niyi Adebayo, Minister of Industry, Trade and Investment, said that collaboration across societal sectors had emerged as one of the defining concepts of international development in the 21st century.

He stressed the need for ECOWAS member states to work together as a bloc to take advantage of the opportunities in the African Continental Free Trade Area.

“Since the establishment of ECOWAS in 1975, various protocols and supplementary protocols regulating member countries conduct have been signed.

“Our world has limited resources — whether financial, natural, or human — and as a society we must optimize their use.

“The fundamental of a good partnership is the ability to bring together diverse resources in ways that we can together achieve more impact, greater sustainability and increased value for all.

“This is so because it emphasises the need to work together as a bloc to leverage and take advantage of the opportunities offered by the African Continental Free Trade Area.

“My Ministry will do everything possible to ensure that the vision of the commission is taken to the next level,” he said.

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