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Nigeria’s Economy Expands Slower than Expected in Q1 2019

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  • Nigeria’s Economy Expands Slower than Expected in Q1 2019

Nigeria’s economic productivity expanded at a slower pace in the first quarter of 2019 than the preceding quarter, data from the National Bureau of Statistics (NBS) has shown.

The report released on Monday showed the economy grew at 2.01 percent year-on-year in the first quarter of 2019, up from the 1.89 percent recorded during the same quarter of 2018. Representing an increase of 0.12 percent.

The NBS, which released both the GDP report for the final quarter of 2018 and the first quarter of 2019 together, showed that the economy expanded at 2.39 percent in the fourth quarter of 2018, indicating a decline of 0.38 percent.

Despite the slightly slower growth rate recorded in the quarter, this is the strongest first quarter since 2015, especially when the uncertainty surrounding the general elections is factored in.

Again, the natural surge in economic productivity due to the increase in demand during the holiday (Christmas) period bolstered growth rate in the final quarter of 2018, therefore Q1 2019 result might just set the tone for the rest of the year.

Aggregate GDP stood at N31,794,085.85 million in nominal terms during the quarter, higher than the N28,438,604.23 million recorded in the first quarter of 2018.

As expected, it was 9.75 percent lower than the N35,230,607.63 million recorded in the preceding quarter when activities were generally high.

Oil Sector

Oil production during the first quarter stood at 1.96 million barrels per day (mbpd), slightly lower than the 1.98mbpd recorded in the corresponding quarter of 2018 but higher than the fourth quarter of 2018 by 0.05mbpd. Oil output during the first quarter was the highest since the second half of 2017.

The oil sector contracted by 2.4 percent year-on-year during the first quarter, indicating a decrease of 16.43 percent relative to the rate recorded in the corresponding quarter of 2018.

Growth in the sector decreased by 0.79 percent from the 1.62 percent decline recorded in the final quarter of 2018.

On a quarterly basis, the oil sector grew at 11.06 percent in the first quarter, accounting for 9.14 percent of the total real GDP in Q1 2019.

Non-Oil Sector

The non-oil sector continued to be the powerhouse of the Nigerian economy, grew at 2.47 percent rate during the first quarter. This was 1.72 percent higher than the number recorded for the same quarter of 2018 and 0.23 percent lower than the fourth quarter of 2018.

During the period, the non-oil sector was driven mainly by Information and communication technology. Other drivers were Agriculture, Transportation and Storage, Trade and Construction.

The sector contributed 90.86 percent to the economy, higher than the first quarter of 2018 when it accounted for 90.45 percent. The sector is expected to contribute even more in the second half of the year, given MTN attractiveness and other adjustments being made by the government to enhance the non-oil sector.

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.

Economy

Prepaid Meter is Free, Buhari Warns DisCos, Agents

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President Muhammadu Buhari once again warned Power Distributing Companies (DisCos) and their agents selling prepaid meters to electricity customers against the Federal Government directive that meter is free.

Ahmed Rufai Zakar, the Special Adviser to the President on Infrastructure, who represented Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders held in Ibadan, Oyo State on Wednesday, said President Buhari understood people’s concerns on issues surrounding electricity and was determined to curb and deal with unscrupulous individuals in the power sector.

He said, “We have made it very clear through the regulators direct order as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost.

“Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

“In cases where we find any disco or disco representative selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law.

“The President has mandated that these meters must be free. We have also said that they must come from local manufacturers.

“This would create jobs and revive our industry.”

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Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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