Nigeria’s Economy Expands Slower than Expected in Q1 2019

• 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.