NewsNigeria’s GDP Contracts By -1.30 Percent In 2016 Fourth Quarter

Nigeria’s GDP Contracts By -1.30 Percent In 2016 Fourth Quarter

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SAN FRANCISCO, February 28, (THEWILL) – The National Bureau of Statistics, NBS, on Tuesday disclosed that the Nigerian economy contracted by -1.15 per cent in 2016, but with a slight improvement overall.

This was as it pointed out in a growth rate report that the nation’s gross domestic product, GDP, in the last quarter of 2016 shrinked by -1.30 per cent.

The statistics agency explained that in real terms, the economy recorded a decline of N240.8bn from N18.53trn in the fourth of 2015 to N18.29trn in the fourth quarter of 2016.

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According to the report, “For the full year 2016, therefore GDP contracted by -1.51 per cent, indicating real GDP of N67, 984.20 billion for the year.

“This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency, and problems in the energy sector such as fuel shortages and lower electricity generation.”

Special Adviser to President Muhammadu Buhari on Economic Matters, Adeyemi Dipeolu, said the new figure shows “the slow-down in the economy for most of 2016 but also show that the recession may have bottomed out because of an improving trend in several key sectors”.

He said further, “Although the oil sector declined by -12.38% on a year on year basis, this was a relative improvement compared to the third quarter when the decline amounted to -22.01%.

“This outcome was due mainly to increases in production such that the quarter on quarter growth for the oil sector between the third and fourth quarters was 8.07%. The non-oil sector however declined by 0.33% after showing some resilience in the third quarter when it grew by 0.03% at the height of the recession.”

Agriculture grew at 4.03 per cent in the fourth quarter of 2016 which was a decrease from the 4.54 per cent growth in the third quarter.

Nevertheless, the overall outcome for the year was that the agricultural sector grew by 4.11 per cent for the whole of 2016 which was higher than the figure of 3.72 per cent for 2015.

The manufacturing sector grew on a quarter on quarter basis by 1.89 per cent but declined over the year by 4.32 per cent reflecting the problems that the sector faced during the year owing to factors ranging from the depreciation in the exchange rate to higher energy costs.

The metal ores sub-sector grew by 7.03 per cent in Q4 of 2016 as compared to 6.93 per cent in the last quarter of 2015.

The services sector, which accounted for 53.55 per cent of GDP in 2016, experienced a decline in growth by -0.82 per cent over the year as compared to a growth of 4.78 per cent in 2015.

In the words of Dipeolu, “This slowdown in the services sector arose from generally fragile economic conditions.

“This is because its fortunes depend to a large extent on consumer spending and government expenditure which were both adversely affected by difficult economic conditions.”

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