Nigeria’s Gross Home Product (GDP) in actual phrases declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded within the earlier quarter (Q2 2020).
That is in line with the third quarter (Q3) GDP report, launched by the Nationwide Bureau of Statistics (NBS) on Saturday.
In line with the report, the efficiency of the economic system in Q3 2020 mirrored residual results of the restrictions to motion and financial exercise applied throughout the nation in early Q2 in response to the COVID-19 pandemic.
Oil Sector plunges
In Q3 2020, the oil sector contracted by –13.89% (year-on-year), indicating a pointy contraction of –20.38% factors relative to the speed recorded within the corresponding quarter of 2019. Moreover, oil sector decreased by –7.26% factors compared with development recorded in Q2 2020 (6.63%).
The sector contributed 8.73% to complete actual GDP in Q3 2020, down from 9.77% and eight.93% respectively recorded within the corresponding interval of 2019 and the previous quarter, Q2 2020.
The common every day oil manufacturing recorded within the third quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpd decrease than the typical manufacturing recorded in the identical quarter of 2019 and 0.14mbpd decrease than manufacturing quantity recorded within the second quarter of 2020 (1.81mbpd)
Supply: Nationwide Bureau of Statistics, Creator’s compilation
Non-oil recedes as manufacturing, commerce, others plunge
The Nigeria’s non-oil sector contracted for the second time because the economic system continues to replicate the impacts of Covid’19 pandemic. In Q3 2020, the non-oil sector grew by –2.51% in actual phrases in the course of the reference quarter, which is –4.36% factors decrease than the speed recorded in Q3 2019 however 3.54% factors larger than within the second quarter of 2020.
Key sectors that contracted in Q3 2020 within the non-oil phase are manufacturing, commerce (wholesale and retail) lodging and meals companies, actual property amongst others. Then again, the expansion non-oil sector was pushed primarily by Info and Communication (Telecommunications), with different drivers being Agriculture (Crop Manufacturing), Development, Monetary and Insurance coverage (Monetary Establishments).
In actual phrases, the non-oil sector contributed 91.27% to the nation’s GDP within the third quarter of 2020, larger than its share within the third quarter of 2019 (90.23% ) and the second quarter of 2020 (91.07%).
Agriculture Sector: Crop Manufacturing remained the key driver of the sector, accounting for 92.93% of total nominal development of the sector in third quarter 2020.
Within the third quarter of 2020, the agricultural sector grew by 1.39% (year-on-year) in actual phrases, a drop of 0.89% factors from the corresponding interval of 2019(2.28%), and a lower of –0.19% factors from Q2 2020 (1.58%).
When it comes to contribution, the sector contributed 30.77% to total GDP in actual phrases in Q3 2020, larger than the contribution within the third quarter of 2019 and the second quarter of 2020 which stood at 29.25% and 24.65% respectively.
Info and Communication: The Info and Communication, one of many resilient sectors within the Nigeran economic system amidst Covid-19, consists of the 4 actions of Telecommunications and Info Providers; Publishing; Movement Image, Sound Recording and Music Manufacturing; and Broadcasting.
In Q3 2020, Info and Communication sector grew by 14.56% in Q3 2020 from 16.52% in Q2 2020 and 9.88% in Q3 2019, largely pushed by Telecommunications & Info Providers.
Manufacturing: Manufacturing sector contracted by -1.51% in Q3 2020 from -8.78% in Q2 2020 and 1.1% in Q3 2019. The contribution of Manufacturing to nominal GDP in Q3 2020 was 13.56%, larger than within the corresponding interval of 2019 (12.34%) and the second quarter of 2020 (11.79%).
Commerce: In actual phrases, commerce’s 12 months on 12 months development stood at –12.12%, which was –10.67% factors decrease than the speed recorded the earlier 12 months (Q3 2019), however 4.46% factors larger than within the previous quarter at –16.59% development fee. Commerce’s contribution to GDP was 13.88%, decrease than the 15.23% it represented within the earlier 12 months, and the 14.28% recorded in 2020.
Finance and Insurance coverage: The Finance and Insurance coverage Sector consists of the 2 subsectors, Monetary Establishments and Insurance coverage, which accounted for 88.89% and 11.11% of the sector in actual phrases in Q3 2020. Monetary Establishments sector grew by 6.8% in Q3 2020 from 28.41% in Q2 2020 and 0.61% in Q3 2019. Nonetheless, Insurance coverage sector contracted by -18.67% in Q3 2020 from -29.53% in Q2 2020 and three.96% in Q3 2019.
The Backside-line: Nigeria’s economic system slides into second recession in 5 years
GDP is Nigeria’s greatest financial knowledge and it measures the financial worth of all the things produced within the nation. It depicts the nation’s complete financial exercise. A recession is a interval of decline normally financial exercise, usually outlined when an economic system experiences a lower in its gross home product for 2 consecutive quarters.
The newest contraction in Nigeria’s GDP indicated the second recession within the nation prior to now 5 years. Recall that the Nigerian economic system entered recession in Q2 2020 when GDP contracted by -2.06% for the second time within the 12 months.
Analysts proceed to dimension the restoration sample for the Nigerian economic system in 2021, with respected shops forecasting a gradual restoration sample on the again of doable second wave of Covid-19 pandemic presently distorting financial panorama within the superior economies.
IMF has forecasted the Nigerian economic system will contract -4.3% in 2020, because the Central Financial institution continues to drive aggressive intervention to stimulate the economic system on the trail of restoration.
Obtain the complete report: GDP Report Q3 2020