Nigeria’s GDP Records Slow Growth In 2019 First Quarter

A figure showing Real GDP Growth between 2015-2019 first quarter/ Photo Credit: NBS

 

Nigeria’s Gross Domestic Product (GDP) has grown by 2.01% in the first quarter of 2019; this is according to figures released by the National Bureau of Statistics (NBS).

The slow growth is recorded in the first quarter after the oil sector contracted.

Compared to the first quarter of 2018, which recorded real GDP growth rate of 1.89%, the first quarter 2019 growth rate represented an increase of 0.12% points. However, relative to the preceding quarter (fourth quarter of 2018), real GDP growth rate declined by -0.38% points.

In the oil sector, -2.40% growth was recorded in first quarter of 2019. This indicated a decrease by -16.43% points relative to the rate recorded in the corresponding quarter of 2018.

This shows a growth decreased by -0.79% points when compared to Q4 2018 which was -1.62%.

 

The Mining and Quarrying sector grew by -2.31% in the first quarter of 2019. Compared to the first and last quarters of 2018, this represented a decline of -16.41% points and -1.07% points respectively.

Also, the agricultural sector grew by 3.17% in the first quarter of 2019, an increase of 0.17% points compared to the corresponding quarter of 2018, and 0.72% points compared to the preceding quarter.

Aggregate GDP stood at N31,794,085.85 million in nominal terms. This aggregate was higher than in the first quarter of 2018 which recorded N28,438,604.23 million, representing a year on year nominal growth rate of 11.80%.

The aggregate was, however, lower than in the preceding quarter of N35,230,607.63 million, by -9.75%.

According to the NBS, the 2019 general elections may have affected the economy’s performance.

It is also described the GDP performance as the strongest first-quarter performance observed since 2015.

Q2 Report: FG Regrets ‘Slight Drop’ In GDP Growth

Minister of Budget and National Planning, Udoma Udo Udoma.

 

The Nigeria Ministry of Budget and National Planning have reacted to the recently released second-quarter Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS).

The Minister of Budget and National Planning, Udoma Udo Udoma, in a statement on Monday, regretted that there was a ‘slight drop’ in real GDP growth rate for the second quarter.

He, however, added that Federal Government is encouraged by the growth recorded in the non-oil sector.

“The Minister regretted that there was a slight drop in real GDP growth rate for Q2, principally as a result of the contraction in the oil sector. The Oil and Gas sector contracted by -3.95% in Q2 2018 compared to a growth rate of 14.77% recorded in Q1 2018 and 3.53% in Q1 2017.

“FG is encouraged by the continuing growth recorded in the non-oil sector, which grew by 2.05% in Q2 of 2018,” he said.

The Minister said he is happy to see that the Nigerian economy registered positive growth in the first and second quarters of the year in spite of the security and other challenges faced by the country.

He said the weaker growth in the Agriculture sector which slowed to 1.19% in the second quarter of 2018 compared to 3.0% in the first quarter of 2018 is another area of concern for Federal Government.

This he partly blamed on security challenges mainly in the North East and North Central zones.

“These security challenges affected activities of farmers with impact on commodity output,” he said.

Udoma said the various measures being taken by the government to tackle the situation is already reducing incidents of violent conflicts and other disruptions to farming activity.

He said the 2.05% growth in the non-oil sector represents the strongest growth in the non-oil GDP since the fourth quarter of 2015. This he noted was evident that the implementation of the targeted policies and programs of the Economic Recovery and Growth Plan (ERGP) is yielding positive results.

According to the NBS report, the non-oil growth was driven by transportation –road, rail, water and air.

The Minister stressed that the focus of the Economic Recovery and Growth Plan (ERGP) is on diversifying the economy away from dependence on the oil and gas sector and was encouraged that efforts are yielding fruits by the continuing growth in the non-oil sector.

Challenges And Progress Of Nigeria’s Cotton Sector

Cotton, NigeriaThe cotton and textile sector plays an important role in the economic development of any nation, as it contributes to its Gross Domestic Product (GDP) as well as creates jobs and income for farmers.

In Nigeria, however, there has been a sharp decrease in cotton farming, as statistics revealed that the contribution of the sector to the GDP fell from about 25% in 1980 to 5% in the most recent indicators.

According to some farmers, the sector is faced with challenges such as lack of improved cotton seeds, diseases and inconsistent policies by the government.

However, it appears to be a good harvest for them unlike before when harvest remained poor, following the inability of the farmers to access improved yields and non-mechanisation of farming techniques among others.

Figures from the National Bureau of Statistics and the Ministry of Agriculture and Rural Development showed that 18 states produce cotton on a total land area of 399.8 hectares in Nigeria.

The survey also disclosed that Zamfara State cultivated the largest land area with 92.6 hectares, followed by Katsina State with 75.9 hectares.

The least cultivated land areas are Ekiti and Ondo states with 0.07 hectares and 0.1 hectares respectively.

Way Out Of The Challenges

At a gathering in Abuja on Tuesday, a speaker, who is also a farmer’s son, Solomon Esu, said his father’s cotton production had dropped over the years owing to some challenges.

However, the Country Coordinator of the Open Forum on Agricultural Biotechnology, Dr Rose Gidado, and the Director General of the National Agency for Biotechnology Development, Professor Lucy Ogbadu, highlighted the way out of the challenges of the cotton and textile industry.

The experts recommended a total overhaul of the sector, stressing that it would provide jobs and the needed income for farmers, as well as contribute to the economic development of the nation.

The Federal Government, at different meetings, had promised to revive the industry through adequate funding.

The farmers described the effort as commendable while they expressed hope that it would result in improved yields and income for them.

FG Commits To Making Right Policies To Push Agriculture Sector

Agriculture-in-NigeriaThe Nigerian government says it is committed to propagating right policies and programmes that will encourage private investor participation in Agriculture and its value chains.

It says this commitment is part of the efforts to boost development drive through economic diversification.

The Minister of State for Agriculture, Heineken Lukpobiri, gave the assurance at the weekend in Ogun State after a meeting with some selected farmers and tour of some palm plantations in Odogbolu Local Government Area of the state.

While assuring the farmers that the agriculture sector of the economy remains the only sector that could pull the country out of the current recession, the Minister, however, reassured farmers of government’s readiness to support Local Farmers with necessary incentives.

Nigeria’s economy has slipped into recession in the second quarter of the year, with Gross Domestic Product contracting by 2.06%, according to a report by the National Bureau of Statistics.

The nation largely depends on crude oil sales for revenue, but the government is pushing to shore up revenue from agriculture which was the nation’s major source of revenue before the discovery of crude oil.

It is a sector that will create jobs for the nation’s unemployed youths, a position that the government has emphasised since the price of crude slumped, affecting the revenue of the oil-rich nation.

Adequate policies in the agriculture sector will enable more investors come into the sector to create jobs, since the nation has vast arable land.

IMF Affirms Nigeria As Africa’s Biggest Economy

Ahead of South Africa and Egypt, the IMF, Nigeria, EconomyInternational Monetary Fund has affirmed Nigeria as the biggest economy in Africa.

Nigeria was reported to have lost its spot as Africa’s biggest economy to South Africa in August 2016, following the recalculation of the country’s Gross Domestic Product.

However, the IMF’s World Economic Outlook for October 2016, puts South Africa’s GDP at 280.36 billion Dollars, from 314.73 billion Dollars in 2015.

Meanwhile, latest estimates from the IMF put Nigeria’s GDP at 415.08 billion Dollars, from 493.83 billion Dollars at the end of 2015.

Although Egypt’s 2016 data was reported as unavailable, its 2015 size remained at 330.15 billion Dollars while that of Algeria, one of the largest economies on the continent, was put at 168.31 billion Dollars.

Global growth is projected to slow to 3.1 percent in 2016 before recovering to 3.4 percent in 2017.

The forecast, revised down by 0.1% point for 2016 and 2017 relative to April, reflects a more subdued outlook for advanced economies following the June U.K. vote in favor of leaving the European Union (Brexit) and weaker-than-expected growth in the United States.

Growth In 2017

The International Monetary Fund also predicted that the Nigerian economy will grow by 0.6% in 2017, effectively lifting the country out of an officially declared recession.

IMF, Nigeria, Recession, 2017
According to the Bretton Woods institution, Nigeria has a marginal lead over South Africa and Egypt in terms of GDP

In the IMF’s WEC report released on October 5, Nigeria’s real GDP is expected to increase marginally by 0.6% with Consumer Prices rising by 17.1% also, Fitch ratings on the other hand, also projected a 2.6% growth in Nigeria’s GDP for 2017.

Nigeria’s Current Account Balance is however also forecast to slump further by 0.4% next year.

Beyond 2017, IMF expects global growth to gradually increase by 3.8% in 2021.

This recovery in global activity, which is expected to be driven entirely by emerging market and developing economies, is premised on the normalization of growth rates in countries like Nigeria, Russia, South Africa, Latin America, and parts of the Middle East.

Although the global rating agency had reduced its forecast for the country’s 2016 GDP growth to 1% from 1.5% due to weak performance in the first half of the year, Fitch believes the economy will bounce back in 2017 but with downside risks if dollar liquidity remains tight.

Furthermore, Fitch believes that dollar liquidity will not significantly improve until market participants become more comfortable with the sustainability of the exchange-rate level, which is likely to require further narrowing of the spread between the official and parallel market rates.

The rating agency also increased Nigeria’s average CPI forecast for 2016 to 14% from 11% and expects the government to secure financing from multilateral development banks and bilateral sources.

 

IMF Predicts Weak Global Economic Growth In Q4 2016

IMF, Economic growth, 2016The International Monetary Fund (IMF), says global economic growth will remain weak this year, following a slowdown in the United States and Britain’s vote to leave the European Union.

In its latest World Economic Outlook released on Tuesday, the IMF expects the world’s economy to expand by 3.1% this year, unchanged from its July projection, while a slight recovery of 3.4% is expected in 2017.

The IMF reduced its forecast for the United States to 1.6% in 2016, down from 2.2% in July, while China, the world’s second largest economy is projected to expand 6.6 percent in the current year and 6.2% next year.

Chief Economist and Economic Counsellor of IMF, Maurice Obstfeld said “taken as a whole, the world economy has moved sideways.

“We have slightly marked down 2016 growth prospects for advanced economies while marking up those in the rest of the world,” he added.

Nigeria’s Economic Recession

Nigeria is one of the countries that is currently experiencing a recession with the IMF concluding that the economy would contract by 1.8%.

The county’s revenue is said to have fallen by as much as 33%, which according to the United Nations resulted in the contraction of the Gross Domestic Product (GDP) in the first three months of 2016.

The largely subsistence agricultural sector has not kept up with rapid population growth, and Nigeria, once a large net exporter of food, now imports large quantity of its food products.

However, economic and financial experts have been proferring solutions which might help revive the economy.

There have been suggestions to diversify the economy and shift attention back to agriculture, manufacturing, and private sector investment.

#Brexit woes

Meanwhile, IMF says with Britain’s vote to leave the EU,  which is both historic and world-changing, it should serve as a wake up call to countries that in several ways have relied on it.

Mr. Obstfeld says although the market reaction to Brexit was reassuringly orderly, the ultimate impact remains very unclear.

He added that the vote has however resulted in more sentiments towards emerging market economies like Nigeria.

Group Asks FG To Declare State Of Emergency On Economy

Naira, dollar, Market FX marketA Civil Society Organisation (CSO) has advised the Federal Government to declare a state of emergency on Nigeria’s economy.

The call follows a report from the National Bureau of Statistics which shows that Nigeria’s Gross Domestic Product (GDP) has contracted by 2.06% in the second quarter of 2016.

The Executive Secretary of the Centre for Social Justice, Mr Eze Onyekpere, made the recommendation on Wednesday while addressing journalists in Abuja, the Federal Capital Territory.

Mr Onyekpere noted that Nigerians were yet to feel the impact of the economic policies.

He advised the government to cut down on its spending and come up with a clear template on how it intends to build the economy.

Nigeria In Recession: Government To Motivate Private Sector Investment

Sam Ohuabunwa , Nigeria, Recession, Private Sector, Investment In the bid to proffer solutions to the ongoing recession in Nigeria, Industrialist, Sam Ohuabunwa says the government should motivate private sector investment.

He gave this suggestion while speaking on the Channels Television breakfast program, Sunrise.

Mr  Sam said in order for the economy to be boosted very fast, the government needs to stimulate production. And to be able to do that, the government’s spending has to be supported by that of the private sector.

He said this in response to the reports by the National Bureau of Statistics, that Nigeria’s Gross Domestic Product (GDP) has contracted by 2.06%.

He also stated that the government should focus on investment as though the life of the nation depends on it. He furthermore suggested that the government should effectively show support to anyone who exhibits productivity.

Government Sector Not Enough To Sustain Economy

Mr Ohuabunwa stressed the need for the government to create an enabling environment for the private sector, as the economy cannot thrive solely on efforts of the Public Sector.

According to him, “Government has to take a definite position as to how to motivate private sector investment, while spending the public sector funds.

“The moment people are doing something that would be productive and linked to wealth creation, let us give them the support.

“A lot of Funding opportunities are being provided by the Central Bank of Nigeria (CBN), Federal Ministry of Agriculture, but the problem is, in implementation, we fall short,” he added.

He further said that there should be a focus on manufacturing and agriculture; and urged individuals as well as the government to do whatever they could, to add value as well as to get the commercial aspect of agriculture activated.

Traditional Rulers Join Anambra State’s Economic Diversification Drive

Traditional Rulers on Anambra's economy
Obi of Onitsha, HRM Alfred Achebe

The Anambra State Council of Traditional Rulers say they are determined to contribute their quota in efforts to break the bounds of mono-economy and shift focus to a broadly creative, self-generating and diversified economy in the state.

The monarchs are optimistic that the step taken by the Council would enable them meet the varied needs of their various communities and that of the entire state population.

It was a decision made at their fifth annual seminar held at their Secretariat Complex within the Government House in Awka, the Anambra State capital in southeast Nigeria.

The theme of the discourse was “Diversification of the Nigerian Economy; a Sine Qua Non for Sustainable Socio-Economic Stability and Growth”.

Mechanised And Commercial Agriculture

Addressing the assembly, Governor Willie Obiano, represented by his deputy, Nkem Okeke, proposed industrialisation and agriculture, as the solution to the challenges of depreciating currency, dwindling national Gross Domestic Product and the sharp rise in the suffering of Nigerians.

Mr Okeke, who commended the organisers for their choice of the theme, highlighted the efforts of the government in agriculture.

He reiterated the commitment of the government to pursuing mechanised and commercial agriculture, saying that huge investment has been made in establishing industrial farms in over five communities in the state.

In their various remarks, the former Governor of Anambra State, Dr. Chukwuemeka Ezeife; as well as the Chairman of the Council and Obi of Onitsha, Alfred Achebe, urged the people of the state to develop interest in agriculture and investment.

The Obi of Onitsha further called for conscious effort to be made by all traditional rulers of the 179 communities, to ensure that their subjects key into the vision of the state government in the area of agriculture and industrialisation.

Nigeria To Restructure ‘Project Act Nollywood’

NollywoodThe Nigerian government is organising a workshop for stakeholders aimed at restructuring and reinvigorating Project ACT Nollywood.

It is a three billion Naira grant programme established by the Federal Government to solve the main challenges impeding the growth of the Nigerian movie industry.

The workshop, which is scheduled for Friday July 1, would be attended by representatives of the key stakeholders in the Nigerian Film industry – the Federal Ministry of Information and Culture, the leadership of Nollywood, the Actors Guild, Film and Videos Censors Board, the Nigerian Film Corporation and the Nigerian Copyright Commission.

It is being organised by the Minister of Finance, Mrs Kemi Adeosun.

Mrs Adeosun said the ideas discussed during the workshop would be part of the inputs for restructuring the project to ensure its sustainability.

So far, the Project ACT Nollywood has implemented specialist training programmes in Nigeria and abroad in which 247 practitioners have been trained to improve their technical and professional capacities in the entertainment industry.

Similarly, 113 film projects, employing 2,436 people, have been co-financed through grants from the fund at the cost of 799 million Naira, while the Innovative Film Distribution Programme has been designed to support viable solutions in film distribution and the prevention of privacy.

One major issue that the workshop will be looking to address is that of piracy, as the World Bank had estimated that for each copy of a Nigerian film sold, nine pirated copies are sold.

The National Bureau for Statistics, has estimated that the Nigerian Film industry contributed 1.4 per cent to the country’s Gross Domestic Product in 2013 and 2014, and employed an estimated 250,000 people directly.

Obiano Flags Off Distribution Of Business Loans To MSME

obinoThe Anambra State Governor, Willie Obiano, has inaugurated the Anambra State Small Business Agency (ASBA).

The Governor also secured two billion Naira development fund from the Central Bank of Nigeria (CBN) through a Memorandum of Understanding, under the Irrevocable Standing Payment Order (ISPO) for lending through ASBA to eligible Micro, Small and Medium Enterprises (MSME).

During the inauguration of ASBA and the distribution of the money to eligible beneficiaries, Governor Obiano said that MSMEs constitute the major drivers of his vision to engender aggressive economic growth that will touch the lives of average citizens of the state positively.

The ASBA was said to have become imperative in compliance with the CBN directive to ensure effective implementation and recovery of funds disbursed to beneficiaries.

He also said that the programme would increase the state’s Gross Domestic Product, as well as create employment and wealth opportunities for the people.

On distributing the money, Obiano urged the beneficiaries to properly utilize the funds and repay them when it is due, to ensure continuity in the programme.

The Head of Development Finance Department of the CBN, Mrs. Uzo Nwankwo, commended the state for being among the few that have accessed the fund. She noted that the joy of giving out the fund will be complete, if the reason for its disbursement is achieved.

For the Managing Director of ASBA, Mr. Clement Chukwuka, ASBA is the state’s special purpose vehicle for assessing the MSMEs fund. He gave an assurance of the commitment of the agency in all aspects to see to the success of the venture.

Nigeria Is In The Right Direction – AMCON Boss

AMCONThe Nigerian intervention model for financial crisis has been rated one of the best in the world.

The Managing Director and Chief Executive of the Assets Management Company of Nigeria (AMCON), Mr Chike Obi, made this assertion during a conversation on Channels Television on Tuesday.

He said that the AMCON as an intervention model had become world acclaimed as one of the best ways to stabilize the financial sector and handle financial crisis in the future.

Mr Obi noted that Nigeria was the only country whose Gross Domestic Product (GDP) continued to remain in the positive during financial crisis.

There had been criticisms against the AMCON system of operation and Mr Obi noted that many were products of several assumptions.

He explained that the AMCON was not out to protect badly managed commercial banks but rather to protect, first the depositors.

“This is the first time in the history of mankind where you had a major financial crisis and no depositor lost a kobo. So its the depositors that were protected, not the banks,” he said.

He noted that if the commercial banks were allowed to “go down”, depositors would have lost their monies.

Mr Obi opined that the solution to the challenges facing Nigeria lies in building institutions and foundations for growth and development.

He noted that solving the issues of corruption in different sectors of the economy would not happen quickly as they cannot be rushed into existence, rather, it would require patience and careful planning.

While admitting that it would be inappropriate for him to defend everything that has been done in the management of the Nigerian financial sector, he added that he would not also ignore all the good things that had been done.

He encouraged Nigerians to look farther into the future as the country had started moving in the right direction that would guarantee a better future for them.

He cited the power sector privatization as one of such policies that would in the end guarantee a better life in the next three to five years, even if there were still challenges at the moment.

Mr Obi, however, also admitted that some mistakes might have been made in the past but what was important was for the leadership of different sectors to learn from their mistakes.