Nigeria’s Gross Domestic Product (GDP) grew by 2.55% in real terms in the fourth quarter (Q4) of 2019, up from 2.38% growth recorded in the fourth quarter of 2018. This means there was a 0.17% point increase in the growth of the Nigerian economy (year-on-year).
According to the data released by the National Bureau of Statistics (NBS), the growth recorded in Q4 2019 represents the highest quarterly growth performance since the 2016 recession.
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Meanwhile, the Nigerian economy in 2019 grew by 2.27% in real terms, standing at N19.53 trillion compared to N19.28 trillion recorded in the corresponding quarter of 2018.
The real growth of the oil sector in Q4 2019 was 6.36% (year-on-year), indicating an increase of 7.98% points compared to the negative growth of 1.62% recorded in the corresponding quarter of 2018.
The report showed that the non-oil sector grew by 2.26% in real terms in the fourth quarter. 0.44% points lower than the rate recorded in the corresponding quarter of 2018 but 0.42% point higher than the Q3 growth rate.
The Nigerian economy grew by 2.27% annually compared to 1.91% in 2018 with a quarter on quarter growth of 5.59%.
The Oil Sector
Oil sector GDP grew by 6.36% in Q4 2019, 0.13% point decrease compared to 6.49% recorded in Q3 2019 and 7.98% points increase compared to -1.62% in Q4 2018.
In terms of contribution, the oil sector contributed 7.32% to the total real GDP in Q4 2019, up from 7.06% recorded in the corresponding quarter.
Meanwhile, the sector’s contribution to GDP went down when compared to 9.77% recorded in the third quarter of 2019.
It should be noted that in the fourth quarter of 2019, the average daily oil production was 2.00 million barrels per day (mbpd) which was 0.09mbpd increase compared to the daily average production of 1.91mbpd recorded in the corresponding quarter of 2018.
However, it was 0.04mbpd lower than the production volume of 2.04mbpd recorded in the third quarter of 2019.
The Non-Oil Sector
In real terms, the non-oil sector grew by 2.26% in the fourth quarter of 2019, which was 0.44% points lower than the rate recorded in the same quarter of 2018 but 0.42% point higher than the third quarter of 2019.
This sector during the fourth quarter of 2019, was driven mainly by Information and Communication (Telecommunications), Agriculture (Crop Production), Financial and Insurance Services (Financial Institutions), and Manufacturing.
In real terms, the Non-Oil sector contributed 92.68% to the nation’s GDP in the fourth quarter of 2019, lower from shares recorded in the fourth quarter of 2018 (92.94%) but higher than the third quarter of 2019 (90.23%).
The annual contribution of the non-Oil sector stood at 91.22% in 2019, 0.19% point reduction compared to 91.41% recorded in 2018.
Key sectors’ performance
The agricultural sector in real terms grew by 2.31% (year-on-year) in Q4 2019, a decrease of 0.14% points from the corresponding quarter of 2018 but an increase of 0.03% points from the preceding quarter.
In terms of contribution, the sector accounted for 26.09% of real GDP in Q4 2019, a marginal reduction of 0.06% point compared to Q4 2018 and 3.16% points decline compared to 29.25% recorded in the preceding quarter.
Majorly, four sub-activities make up the Agricultural sector: Crop production, Livestock, Forestry, and Fishing.
The manufacturing sector in the fourth quarter of 2019 was 1.24% (year-on-year) in real terms, lower than Q4 2018 but higher than the preceding quarter by 1.11% points and 0.14% points respectively.
Contribution of the manufacturing sector to real GDP in Q4 2019 was 8.74%, 0.12% point lower than the 8.86% recorded in the fourth quarter of 2018 but maintained a steady 8.74% contribution as recorded in Q3 2019.
The full-year 2019 real contribution of the manufacturing sector was 9.06% against 9.2% recorded in 2018.
The service sector grew by 2.6% in Q4 2019, higher than 1.87% recorded in Q3 2019 and 0.3% point lower than 2.9% recorded in Q4 2018. The sector’s contribution to real GDP increased from 48.59% recorded in Q3 2019 to 53.64% in Q4 2019.
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The key takeaways
GDP is Nigeria’s biggest economic data and it measures the monetary value of everything produced in the country. It depicts the nation’s total economic activity. A decline in GDP means major economic activities are slow or sluggish, which may be a result of several factors.
The latest GDP figures show that the Nigerian economy grew quarterly by 2.55%, being the highest post-recession growth while the annual growth was 2.27%.
The agricultural sector, which was expected to grow due to the continued land border closure and increased agricultural practices in the country, grew only marginally by 2.31% compared to 2.28% recorded in its preceding quarter and a decline compared to 2.46% recorded in its corresponding quarter of 2018.
In general, the agricultural sector grew by 2.36% annually in 2019 compared to 2.12% in 2018.