Nigeria’s Economy Rises In Q1 2020 Amidst CoVid-19

Against the backdrop of global economic strains resulting from COVID-19 pandemic, Nigeria’s Gross Domestic Product (GDP), grew by 1.87% Year on Year (YoY) in real terms, according to the data published by the Nigerian Bureau of Statistics (NBS).

The performance recorded in Q1 2020, represents a drop of -0.23% points compared to Q1 2019 and -0.68% points compared to Q4 2019, reflecting the earliest effects of the disruption, particularly on the non-oil economy. Quarter on quarter, real GDP growth was -14.27% compared to 5.59% recorded in the Q4 2019.

The oil sector performance stood at average daily production of 2.07 million barrels per day (mbpd). The production level was higher than the 1.99mbpd recorded in the same quarter of 2019 by 0.08mbpd and the fourth quarter of 2019 by 0.06mbpd.

There was a record of real growth rate of 5.06% yoy in the Q1 2020, indicating an increase of 6.51% points relative to the rate recorded in the corresponding quarter of 2019. However, there was -1.30% points decrease compared to Q4 2019 which was 6.36%. Quarter-on-quarter, the oil sector recorded a growth rate of 11.30% in Q1 2020.

Consequently, the non-oil sector added 1.55% growth in real terms in Q1 2020. That’s -0.93% points slower compared to the same quarter in 2019, and -072% slower than the Q4 of 2019.

The non-oil sector was sparked mainly by telecommunications, finance, agriculture, mining and quarrying and construction. The non-oil sector contributed 90.50% to the nation’s GDP in Q1 2020, in real terms, compared to 90.78% of the same quarter in the preceding year, and 92.68% in the Q4. Road transport, quarrying, accommodation, real estate and food services recorded the lowest performance.

In the mining and quarrying sector, which consists of crude petroleum and natural gas, coal mining, metal ore and other minerals, there was a nominal growth of -10.57% yoy in Q1 2020. While metal ore recorded the highest growth rate of all sub-activities at 8.72%, followed by crude petroleum and natural gas activity which stood at -10.20%, it was crude petroleum and natural gas that contributed most to the sector with 99.51% growth in the Q1 2020.

The mining and quarrying sector grew in real terms by 4.58% yoy, compared to the same quarter of 2019, the Q1 2020 was higher by 5.95% points but lower by -1.49% points when compared to Q4 2019. The quarter on quarter growth recorded stood at 9.36%. The total contribution of mining and quarrying to the real GDP was 9.54% for Q1 2020.

In the agricultural sector, there was a 22.47% yoy growth in nominal terms in the Q1 2020, indicating a decline of -0.11% points from the same quarter in 2019. The sector recorded an increase of 8.66% points when compared to the 13.80% growth rate of Q4 2019. Crop production accounted for 90.54% of overall nominal growth in the sector. Quarter on quarter growth stood at -19.58% in Q1 2020. The agricultural sector contributed 20.88% to nominal GDP in the Q1 of 2020.

The agricultural sector grew by 2.20% year on year in the first quarter of 2020, in real terms, indicating a -0.97% points compared to the same quarter in 2019. On a quarter on quarter basis, the real agriculture sector growth was -27.81%. The sector made 21.96% contribution to overall GDP in real terms in Q1 2020.

Information and communication sector’s growth stood at 8.94% in nominal terms yoy, a -2.51% points decrease from the rate of 11.45% recorded in the same quarter of 2019, and -0.93% points lower than the rate recorded in the preceding quarter. There was a -7.20% quarter on quarter growth in the first quarter of 2020.

The information and communication sector contributed 10.31% to total nominal GDP in the Q1 2020, lower than the rate of 10.60% recorded in the same quarter of 2019. In the first quarter of 2020, the information and communications sector recorded a growth rate of 7.65% in real terms, yoy. Compared to the same period of the preceding year, there’s a decrease of -1.84% points. Quarter on quarter growth stood at -8.02% in real terms. The sector contributed 14.07% to total real GDP in Q1 2020.

The increase recorded in most of the sectors contributed to the 1.87% GDP growth, but compared to the preceding year, the Q1 2020 has underperformed, mainly, due to the decline in oil price and events that the year 2020 was ushered in with.

With this scorecard, the second quarter of the year will undoubtedly yield negative growth due to the impact of the coronavirus crisis. The International Monetary Fund (IMF) said Nigeria should brace up for its worst recession.

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