Recession Hits Harder as Nigerias Economy Declines by 2.24% in Q3

The Nigerian Bureau of statistics has released the Gross Domestic Product for the third quarter of 2016.According to NBS, the Economy declined by 2.24%.
This statistics shows that, it dropped further than that of the first and second quarter.The Nigerian economy fell by 0.36 and 2.06 in the first and second quarter respectively.
For Nigeria to move out of Economic Recession, the NBS noted that ,the country must attain a GDP of 4.32%
Far from the Federal Government’s assur­ances, Nigeria is still not on the path to eco­nomic recovery.
Indeed, the report for the third quarter of 2016 shows that the current recession has worsened.
Instead of the predicted gradual recovery of the econ­omy during the period under review, the Gross Domestic Product (GDP) has contracted by 2.24% (year-on-year) in real terms from 2.06% for the previ­ous quarter.
These facts are contained in a report released on Monday by the National Bureau of Statis­tics (NBS).
The report put the real GDP for the third quarter at N1.78 trillion.
The NBS said that the con­traction of the economy in the third quarter was lower by 0.18% from the preceding quarter which was also lower by 5.08% from the growth re­corded in the corresponding quarter of 2015.

 It said: “During the quarter, aggregate GDP stood at N26.6 trillion (in nominal terms) at ba­sic prices, compared to the third quarter 2015 value of N24.3 tril­lion. Nominal GDP grew by 9.23%. This growth was high­er relative to growth recorded in the third quarter of 2015 by 3.22% points.”
But despite the poor rating of the economy, the Presidency has said that there is a consistent growth in non-oil sectors such as agriculture and solid minerals, which it explained as indicating the success of the Buhari admin­istration’s economic policies.
This was the reaction of the Special Adviser to the President on Economic Matters, Dr. Adey­emi Dipeolu, on behalf of Pres­ident Buhari’s Economic Man­agement Team, to the third quarter GDP figures released by the NBS.
While admitting that the recession is still on, the Presi­dency noted that the overriding impact of the oil and gas sector, where vandalism and sabotage of critical installations negative­ly affected production output, caused the recession to persist.
The Presidency added that efforts to resolve the Niger Delta situation were continuing as the Federal Government has opened several channels of communi­cation with all the major stake­holders in the Niger Delta.
Dipeolu said: “The slight de­terioration in national econom­ic performance owes largely to the continued poor performance of the oil and gas sector which worsened to -22.01 per cent in the third quarter as compared to -17.48% in the second quar­ter of 2016. The immediate cause of this, as is now generally recog­nised, is the steep decline in oil and gas production in the third quarter of 2016 due to acts of vandalism and sabotage of oil export facilities.
“The remote causes include the continued out-sized influ­ence of the oil and gas sector on the rest of the economy as typ­ified by its contribution to gov­ernment revenue and foreign exchange earnings, which con­tinue to be important motors of economic activity.
“Moreover, due to time lags, it is still too early for policy in­terventions of the Federal Gov­ernment to begin to impact ful­ly on economic activity.
“There are however some ‘green shoots’ of economic re­covery beginning to emerge. To start with, ongoing consul­tations to bring lasting peace to the Niger Delta have enabled an increase in oil and gas produc­tion which if sustained at cur­rent prices, will bring a measure of relief to the economy”.
On the sectoral performance of the economy, the NBS said that the Nigerian National Pe­troleum Corporation (NNPC) reported that the country’s oil production capacity averaged about 1.63 million barrels per day (mbpd), lower from the figures in the second quarter of 2016.
The oil sector accounted for about 8.19% of the total real GDP, down from figures record­ed in the corresponding period of 2015 and the preceding quar­ter of 2016 recorded at 10.27% and 8.26% while the growth in the non-oil sector was largely driven by the activities of agri­culture (crop production), in­formation and communication and other services.
According to the NBS, the sectoral contributions to the GDP during the quarter re­vealed that the agriculture ac­counted for 28.66%; industries, 21.1%, and services, 50.2%.
However, it showed that the 0.03% growth in the non-oil sector in real terms in the third quarter of 2016 reversed the negative growth recorded in the first and second quarters of the year.
The Presidency stated that the financial sector rebound­ed quite strongly in the peri­od under review growing by 2.85% from a negative growth of -13.24% in the second quarter.
“The recently approved first tranche of $600 million to be borrowed from the African Development Bank will also provide some relief in budget­ary terms and supplement cap­ital inflows.
“Indeed, there was a slight uptick of capital inflows into the economy in the third quarter of 2016. Overall capital inflows in the third quarter of 2016 in­creased by 74.84% over the sec­ond quarter,” Dipeolu said.