Nigeria’s economy is on the verge of a recession. Nigeria’s economic growth hit negative numbers in the first quarter of 2016, falling to the lowest level since 1991, the National Bureau of Statistics (NBS) reported on Friday. The country’s oil output slumped and the manufacturing, financial and real estate industries declined with unemployment rate reaching 12.1%.
The NBS said GDP fell to -0.36 percent year-on-year (YoY) in Q1 2016 compared with 2.11 percent YoY recorded in Q4 2015 and 3.96 percent YoY recorded in a corresponding quarter of 2015. The last time Nigeria’s economy contracted was in 1995, when GDP fell to -0.3 percent, and 1991, when growth fell to -0.6 percent, according to World Bank figures.
President Muhammadu Buhari has maintained a strong headed stance, “refusing calls by investors to devalue the naira, which has been pegged at 197-199 per dollar for more than a year. Foreign-exchange trading restrictions and import curbs have led to shortages of goods from gasoline to milk and contributed to the contraction in factory output in the quarter,” writes a reporter with Bloomberg.
“It’s inevitable that we’ll go into recession,” Pabina Yinkere, an analyst at Vetiva Capital Management Ltd. and the only contributor to Bloomberg’s survey who predicted a contraction, said by phone from Lagos on Friday. “I expect the second quarter to be even worse.”
“We have one more month to evade a recession, and that’s just not going to happen. Let’s not fool ourselves,” Bismarck Rewane, chief executive officer of Lagos-based consultancy Financial Derivatives Co., said by phone. “We’ve had strikes, petrol queues, and disruption of oil production, all showing we’re headed to another negative quarter.”
In Q1 2016, oil GDP was estimated at -1.89 percent compared with -8.28 percent posted in Q4 2015 and -8.15 percent recorded in Q1 2015. Non-oil GDP fell to -0.18 percent from 3.14 percent recorded in Q4 2015 and 5.59 percent recorded in the first quarter of last year.
Electricity and gas GDP declined by -44.4 percent in Q1 2016 from 1.20 percent and -27.92% recorded in Q4 and Q1 2015, respectively. The Industries GDP depreciated by -5.49 percent in Q1 2016 from -3.04 percent recorded in Q4 2015 and -2.53 percent recorded in Q1 2015.
Manufacturing GDP fell by -7.0 percent in Q1 2016 from 0.38 percent and -0.70 percent recorded in q4 and q1 2015, respectively. Other (light) manufacturing GDP declined by -12.22 percent in Q1 2016 from -1.06 percent and -5.67 percent in Q4 and Q1 2015, respectively.
Finance and insurance GDP shrunk by -11.28 percent in Q1 2016 from 6.41 percent and 9.01 percent in Q4 and Q1 2015, respectively, while financial institutions GDP declined by -13.1 percent in the first quarter of 2016 from 6.62 percent and 9.52 percent in Q4 and Q1 2015, respectively.
In the period under review, the NBS said some sectors of the Nigerian economy recorded positive growth.
In Q1 2016, Agric GDP stood at 3.09 percent compared with 3.48 percent recorded in Q4 2015 and 4.70 percent in Q1 2015. Services GDP was 0.8 percent in the first quarter of this year compared with 3.69 percent in Q4 2014 and 7.94 percent in Q1 2015.
Broadcasting GDP fell by 6.85 percent in Q1 2016 from 13.2 percent and 25.6 percent recorded in Q4 and Q1 2015, respectively. Crop production GDP stood at 3.02 percent in Q1 2016 compared with 3.25 percent and 4.46 percent recorded in Q4 and Q1 2015, respectively.
Transport services GDP growth rate was 2.23 percent in Q1 2016 compared with 5.14 percent and 7.57 percent recorded in Q4 and Q1 2015, respectively. Human health and social services GDP stood at 0.55 percent in Q1 2016 compared with 2.86 percent and 2.11 percent in Q4 and Q1 2015, respectively.
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