Nigeria remains in recession, records negative GDP growth in Q1

Chances of Nigeria coming out of its current economy recession in the nearest time looks gloomy, as the National Bureau of Statistics (NBS) on Tuesday revealed that the nation has recorded a 2017 first quarter (Q1) Gross Domestic Product growth rate of -0.52 per cent, which means that the largest economy in Africa is still in a recession.

The latest negative economic growth rate represents the fifth consecutive quarter of contraction since Q1 2016, while recording 0.15 per cent higher than the rate recorded in the corresponding quarter of 2016 and higher by 1.21 per cent points from the rate recorded in the preceding quarter. However, quarter on quarter, real GDP growth was 12.92 per cent.

During the quarter, aggregate GDP stood at N26,028,356.03 million in nominal terms, compared to N22,235,315.29 million in Q1 2016, resulting in a Nominal GDP growth of 17.06%. This growth was higher relative to growth recorded in Q1 2016 (11.39%). The Nigerian economy can be more clearly understood when classified into oil and non-oil

Financial analysts believed that for Nigeria to exit the recession officially, it will have to post a positive real GDP growth rate. At -0.52%, the first quarter real GDP growth rate is a much more improvement from the -1.73 recorded in the last quarter of 2016.

But NBS stated that the latest contraction of 0.52 percent is the best performance in four quarters, compared to revised 1.73 percent contraction in Q4 of 2016 and 0.67 percent in Q1 2016.

Still in negative territory, the oil sector saw a boost in its fortune as it contributes 8.9 percent of the country’s GDP, as against the 6.75 percent in the fourth quarter of 2016.

The non-oil GDP grew by 0.72 percent to record the best performance in four quarters, when compared to -0.33 percent in Q4 2016 and -0.18 percent in Q1 2016.

Despite this performance, the contribution of the non-oil sector to GDP declined by nearly two percent from 93.25 percent in Q4 2016 to 91.10 percent.

Transport services GDP contracted by 4.01 percent in Q1 2017 from -2.63 percent in Q4 2016 and 2.23 percent in Q1 2016.

According to Yemi Kale, the statistician general of the nation, many sectors of the economy turned positive but failed to get the country out of recession.

In August 2016, NBS called Nigeria’s first recession since the return of democracy in 1999, stating that the economy shrank by 2.06 percent in the second quarter of 2016 to hit its lowest point in nearly three decades.

According to World Bank data, the last time Nigeria had this magnitude of economic decline was under the military regime of Ibrahim Babangida, when the economy recorded consecutive decline of 0.51 percent and 0.82 percent in first and second quarters of 1987.

The World Bank, IMF, CBN, ministry of finance and Nigerian presidency have all said at one time or the other that the Nigerian economy will get out of recession in 2017.