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Services Sector up by 1.83 % in 2018 – NBS

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The National Bureau of Statistics (NBS), said the services sector of the economy measured by the Gross Domestic Product (GDP) grew by 1.83 per cent in 2018.

The NBS disclosed this in its “GDP Report for the Fourth and Full Year 2018’’ posted on its website.

The bureau said the sector had recorded positive growth as the figures moved from -0.82 per cent in 2016 and -0.91 per cent in 2017 to 1.83 per cent in 2018.

The report showed that the sector had also recorded best performance in 11 quarters from 2016 to 2018.

Some of the services sectors are construction, transport and storage, Information and communication, Art, Entertainment and Recreation, and electricity supply.

They also include water supply, waste management, accommodation and food services, financial and insurance as well as health and social services.

For instance, the construction sector grew by 58.51 per cent in fourth quarter, 2018 in nominal terms.

These figures reflected an increase of 39.26 per cent points when compared to the growth rate of 19.25 per cent that was recorded in fourth quarter of 2017.

It also showed an increase of 5.84 per cent points when compared to its growth rate in the preceding quarter.

Quarter on quarter, nominal growth in this sector was 26.41 per cent, while for 2018, nominal growth rate was 40.85 per cent.

Furthermore, the sector contributed 5.03 per cent to nominal GDP in fourth quarter, 2018, which was higher than both the 3.58 per cent contribution 2017 and the 4.20 per cent contribution recorded in third quarter, 2018.

On an annual basis, nominal contribution to GDP in 2018 also improved (4.72 per cent), compared to 2017 (3.77 per cent).

Overall, the sector’s contribution to real GDP in fourth quarter, 2018 remained relatively unchanged (3.48 per cent) compared to 2017 (3.49 per cent), but higher than in the preceding quarter (3.01 per cent).

The sector’s contribution to total real GDP in 2018 also remained relatively stable at 3.73 per cent compared to 2017.

Meanwhile, the transport and storage sector’s contribution to real GDP in fourth quarter, 2018 was 1.46 per cent and 1.37 per cent for the whole of 2018, road transport being the dominant activity (85 per cent).

Six activities made up the Transportation and Storage sector: road, rail and pipelines, water air transport, transport services; and post and courier service.

In real terms, the Information and Communication sector recorded a growth rate of 13.20 per cent in fourth quarter, 2018, representing an increase of 14.65 per cent points when compared to fourth quarter, 2017.

Quarter on quarter, the sector exhibited a real GDP growth rate of 23.75 per cent. For 2018, real GDP growth rate stood at 9.65 per cent.

By contribution to the economy, the sector accounted for 12.40 per cent of total real GDP in fourth quarter, 2018 and 12.22 per cent of total real GDP in 2018.

Also, Arts, Entertainment and Recreation sector grew by 5.06 per cent in fourth quarter, 2018 in nominal terms.

This represented an increase of 1.51 per cent points relative to the preceding quarter and an increase of 0.89 per cent points relative to the preceding year.

Annual growth in nominal terms was 3.06 per cent in 2018, a decline from 9.07 per cent recorded in 2017.

By contribution, the activity accounted for 0.18 per cent of nominal GDP in fourth quarter, 2018 and 0.21 per cent of total annual nominal GDP in 2018.

In real terms, the activity grew by 4.18 per cent in fourth quarter, 2018 which was higher than the rate recorded in fourth quarter, 2017 and third quarter, 2016.

The rate recorded in fourth quarter 2017 was 0.64 per cent points higher and the rate recorded in third quarter, 2018 was 1.35 per cent points higher.

On an annual basis, real GDP growth rate was slower for the activity in 2018 at 2.53 per cent compared to 4.13 per cent recorded in 2017.

Arts, Entertainment and Recreation contributed 0.20 per cent to real GDP in fourth quarter, 2018 and 0.22 per cent for the whole of 2018, remaining relatively stable over the past year.

According to the NBS, the methodologies used in computing the GDP is in line with international standards outlined under the UN Statistics Division (UNSTATS)

Quarterly National Accounts (QNA) are an integrated system of macroeconomic accounts designed to describe the entire system of production in a nation on a quarterly basis.

They provide a picture of the current economic status of an economy on a more frequent basis than Annual National Accounts (ANA).

In providing a reasonable level of detailed information of the economy, QNA allows the government to regularly assess, analyse and monitor economic developments.

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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Economy

World Bank Lauds Kogi’s 2020 Financial Statement

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The World Bank has heaped praise on the Government of Kogi State concerning the state’s audited financial statement for 2020. The financial institution was said to have described the financial report as a standard to look up to concerning transparency and accountability in the public sector.

In a statement which was dated November 21, 2021 it was said that the bank made the commendation in a letter which was sent to the Accountant General of the state.

As said in the statement, the letter which was taken by the Kogi State Accountant General on November 2025 was signed by Deborah Hannah Isser, the Task Team Leader of the States Fiscal Transparency, Accountability and Sustainability Programme (SFTAS), Nigeria Country Office, Western and Central African Region.

SFTAS is a $750 million programme which has been set up to reward states for meeting any or every one of the indicators which demonstrate improvements in fiscal transparency, sustainability and accountability.

The indicators, which are nine in number were a byproduct of the former Fiscal Sustainability Plan of the federal government where States would be rewarded for meeting up to 22 targets.

The World Bank had previously backed the federal government to give incentives to the states in order to properly execute the 22-point Fiscal Sustainability Plan, which has now gone under a revamp as the nine Disbursement Linked Indicators under SFTAS.

Some of the criteria on which judgement will be based on are: improvement in financial reporting and budget reliability, improved cash management, increased openness, citizen participation in the budget process, reduced revenue leakages through the execution of State Treasury Single Account (TSA), a strengthened Internally Generated Revenue (IGR) collection, biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.

The World Bank commended the Kogi State government for preparing its audited financial statements in line with the basis of the International Public Sector Accounting Standards.

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Economy

Nigeria’s Rigid Forex Policy Discouraging Investors, Fueling Inflation – World Bank

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The World Bank has blamed the Central Bank of Nigeria’s rigid forex policy for the drop in Nigeria’s capital importation and rising inflation rate.

The bank disclosed in its November report, Nigeria Development Update.

Explaining modalities for its position, the World Bank stated that there had been constant pressure on the Nigerian Naira with the current forex policy, forcing the central bank to consistently increase its nominal official exchange rate in an effort to ease some of the pressure.

This, it blamed on the rigid foreign exchange management system of the Central Bank of Nigeria, saying the system has also been responsible for the rising inflation rate in Nigeria.

The report read in part, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.

“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 per cent in March 2020, five per cent in August 2020, and seven per cent in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”

The World Bank further stated that the central bank foreign exchange system needs to be more flexible to withstand external shocks, especially given Nigeria’s mono-product nature. It added that the NAFEX rate does not reflect the true market rate but the central bank managed rate.

It read in part, “While the CBN supplied an average of $2.5bn to the Investors and Exporters forex window in the months just prior to the COVID-19 crisis, it only supplied an average of $0.5bn in the months thereafter.

“The NAFEX rate, which is now the guiding exchange rate for the economy, continues to be managed and is not fully reflective of market conditions. The parallel market premium over the NAFEX rate reached 29 per cent in August 2021 after the CBN cut off its weekly supply of $20,000 per bureau de change. The CBN has intermittently supplied forex to BDCs since 2005, providing ample opportunities for currency round-tripping.”

The institution however advised that Nigeria adopt a more predictable, transparent and flexible foreign exchange management system in order to attract and sustain private investment flows.

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Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance

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Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.

Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.

According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.

Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.

The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.

She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.

Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”

“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.

Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.

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