•As GDP contracts -3.62 % in Q3
As anticipated in the face of COVID- 19 pandemic, Nigeria slipped into its worse economic recession in over three decades yesterday, with the gross domestic product (GDP) contracting by -3.62 per cent (year-on-year) in real terms in the third quarter of 2020.
According to the data released yesterday by the National Bureau of Statistics (NBS), with latest contraction in GDP figures, the Nigerian economy posted consecutively two contractions in one year, setting economy on its worse recession.
Contractions were recorded across key sectors of the economy both in oil and non oil sectors. NBS’s appraisal of the oil sector, noted that the real growth in the sector recorded –13.89 per cent (year-onyear) in Q3 2020, indicating a sharp contraction of –20.38 per cent points relative to the rate recorded in the corresponding quarter of 2019. In addition, real oil growth decreased by –7.26 per cent points when compared with the oil sector growth recorded in Q2 2020 (6.63 per cent).
However, Quarter on quarter, the sector recorded a growth rate of 9.64 per cent in Q3 2020. The sector contributed 8.73 per cent to total real GDP in Q3 2020, down from 9.77 per cent and 8.93 per cent respectively recorded in the corresponding period of 2019 and the preceding quarter, Q2 2020.
Average daily oil production recorded third quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpd lower than the average production recorded in the same quarter of 2019 and 0.14mbpd lower than production volume re-corded in the second quarter of 2020.
Similarly , non-oil sector grew by –2.51 per cent in real terms during the reference quarter, indicating –4.36 per cent points lower than the rate recorded in Q3 2019 but 3.54 per cent points higher than in the second quarter of 2020. The non-oil sector was driven mainly by the Information and Communication (Telecommunications), with other drivers being Agriculture (Crop Production), Construction, Financial and Insurance (Financial Institutions), and Public Administration.
In real terms, the non-oil sector contributed 91.27 per cent to the nation’s GDP in the third quarter of 2020, higher than its share in the third quarter of 2019 (90.23per cent) and the second quarter of 2020 (91.07 per cent). “In the third quarter of 2020, the agricultural sector grew by 1.39 per cent (yearon- year) in real terms, a drop of 0.89 per cent points from the corresponding period of 2019, and a decrease of –0.19 per cent points from the preceding quarter.
On a quarter on quarter basis, agriculture GDP grew 39.95 per cent. “In terms of contribution, the sector contributed 30.77 per cent to overall GDP in real terms in Q3 2020, higher than the contribution in the third quarter of 2019 and the second quarter of 2020 which stood at 29.25 per cent and 24.65 per cent respectively”, according to NBS data.
NBS attributed weak growth of the economy in Q3 2020 as reflection of residual effects of the restrictions to movement and economic activity implemented across the country in early Q2 in response to the COVID- 19 pandemic. It noted that as these restrictions were lifted, businesses re-opened and international travel and trading activities resumed, some economic activities have returned to positive growth.