Nigeria’s GDP shrinks by 0.45% in Q2 of 2018 –NBS

According to statistics released earlier today by the National Bureau of Statistics (NBS), in the second quarter of 2018, Nigeria’s GDP grew by 1.50% (year-on-year) in real terms to N16.58trillion. Growth in Q2 2018 was 0.79% points higher when compared to the second quarter of 2017 which recorded a growth of 0.72%, but –0.45% points slower than 1.95% recorded in the first quarter of 2018. On a quarter on quarter basis, real GDP growth was 2.94%.

In the quarter under review, aggregate GDP stood at N30.69trillion in nominal terms. This represents a 7.85% increase in nominal GDP when compared to the preceding quarter (N28.46trillion) and 13.57% increase when compared to the corresponding quarter of 2017 (N27.03trillion).

For better clarity, the Nigerian economy can be classified broadly into the oil and non-oil sectors .

Broadly speaking, growth in Nigeria’s GDP Q2 2018 was driven by developments in the non-oil sector as Services sector recorded its strongest positive growth since 2016. However, the relatively slower growth when compared to Q1 2018 and Q2 2017 could be attributed to developments in both the oil and non-oil sectors.

In the second quarter of 2018, average daily oil production was recorded at 1.84million barrels per day(mbpd), lower than the daily average production of 1.87mbpd recorded in the same quarter of 2017 by -0.03mbpd and also lower than the production volume of 2.0mbpd seen in the first quarter of 2018.

Real growth of the oil sector was –3.95% (year-on-year) in Q2 2018 indicating a decrease by –7.48% points relative to the rate recorded in the corresponding quarter of 2017. Growth also decreased by –18.72% points when compared to Q1 2018. Quarter-on-Quarter, the oil sector recorded a growth rate of –8.34% in Q2 2018. The Oil sector contributed 8.55% to total real GDP in Q2 2018, down from figures recorded in the corresponding period of 2017 and the preceding quarter, where it contributed 9.04% and 9.61% respectively. The developments in the oil sector occurred at the same time as crude oil price (Brent) has maintained steady rise from $65.32 per barrel in January, reaching $76.98 in May, before falling slightly to $74.4 per barrel in June.

On the other hand, The non-oil sector grew by 2.05% in real terms during the reference quarter. This represents 1.60% points increase compared to the rate recorded for the same quarter in 2017, and 1.29% points over the first quarter of 2018. The non-oil sector was mainly driven by Information and communication services. Other notable drivers included Construction, Agriculture, Transportation and Storage and Other Services. In real terms, the Non-Oil sector contributed 91.45% to the nation’s GDP, compared to 90.96% recorded in Q2 2017 and 90.39% recorded in the preceding quarter.

The report further showed that Nominal GDP growth of the Manufacturing sector in the second quarter of 2018 was recorded as 19.52% (year-on-year), 3.55% points higher than figures recorded in the corresponding period of 2017 (15.97%) and 10.59% points higher than the preceding quarter figure of 8.93%. Quarter on Quarter growth of the sector is recorded at 10.45%. The contribution of Manufacturing to Nominal GDP in the current quarter is 9.49% , higher than growth recorded in the corresponding period of 2017 at 9.02% and the first quarter of 2018 at 9.27%. Real GDP growth in the manufacturing sector in the current quarter of 2018 was 0.68% (year on year), marginally higher than the same quarter of 2017 but lower than the preceding quarter by 0.04% points and –2.71% points respectively (Figure 6). Growth rate of the sector on a quarter-on-quarter basis stands at
–3.51% . Real contribution to GDP in 2018 second quarter was 9.29% .

The Agricultural sector grew by 10.64% year-on-year in nominal terms, showing a decline by –1.89% points from the same quarter of 2017. Looking at the preceding quarter’s growth rate of 5.80% there is an increase of 4.84% points. Crop Production remains the major driver of the sector. This is evident as it accounts for 92.06% of overall nominal growth of the sector. In the second quarter of 2018, Agriculture contributed 18.78% to nominal GDP. This figure is lower than the rates recorded for the second quarter of 2017 and higher than the first quarter of 2018 which recorded 19.28% and 17.42% respectively.

Real GDP growth of Health and Social Services for Q2 2018 stood at 0.41% (year-on-year) compared to –0.96% for the corresponding period of 2017, which shows an increase of 1.37% points. Quarter-on-Quarter, this sector grew by 5.42%. The contribution of Human Health and Social Services to real GDP was 0.72% in Q2 2018, relatively same from the 0.72 % recorded in Q2 2017 but up from the 0.70 % recorded for the preceding quarter.

THE PUBLIC ADMINISTRATION SECTOR recorded a growth rate of –5.21% (year on year in real terms) in Q2 2018, lower by –6.84% points and lower by –3.49% points from the Q2 2017 rate and the Q1 2018 rate respectively. On Quarter on Quarter, the sector grew by 6.00% in Q2 2018. The contribution of Public Administration to Real GDP stood at 2.29% in Q2 2018, lower compared to 2.45% in Q2 2017 and higher from 2.23% in Q1 2018 by –0.16 % points and 0.07% points. respectively.

Real growth in Professional, Scientific and Technical Services sector was recorded at 2.07% in Q2 2018, an increase of 3.78% points relative to the rate recorded in the corresponding period of 2017, and 4.42% points higher than that of Q1 2018. On a quarteron-quarter basis, the sector grew by 5.36% in Q2 2018. Professional, Scientific and Technical Services contributed 3.59% to aggregate GDP in Q2 2018, higher than the 3.57% it contributed in Q2 2017 and higher than 3.51% in Q1 2018 by 0.02% points and 0.08% points respectively

Real growth in Education year-on-year stood at -0.67% in Q2 2018; an increase of 0.68% points from the corresponding quarter of 2017 which was estimated at –1.34%. When compared with the previous quarter’s rate of 0.45%, the sector decreased by -1.11% points. The Sector contributed 1.79% to total real GDP in Q2 2018 which was lower as against 1.83% reported for corresponding Quarter of 2017 and lower than 2.15% recorded in Q1 2018 by -0.04% points and –0.35% points respectively.

As a whole, the FINANCIAL SERVICES sector grew at 3.49% in nominal terms (year on year), with the growth rate of Financial Institutions as 3.01% and 6.07% growth rate recorded for Insurance. The overall rate was lower than that in Q2 2017 by –14.19% points, and lower by -10.34% points than the preceding quarter. Quarter on Quarter growth was –1.94%. The sector’s contribution to the overall nominal GDP was 3.42% in Q2 2018, lower than the 3.75% it represented a year previous, and lower from the contribution of 3.76% it made in the preceding quarter. by -0.33% points and -0.34% points respectively.

Real GDP growth recorded in REAL ESTATE the sector in Q2 2018 stood at -3.88%, lower from growth recorded in Q2 2017 by –0.36% points and higher by 5.52% points relative to Q1 2018. Quarter-on-quarter, the sector grew by 24.70% in the second quarter 2018. It contributed 6.83 % to real GDP in Q2 2018, lower than the 7.21% it recorded in the corresponding quarter of 2017 and higher than the 5.63 % in the preceding quarter by -0.38% points and 1.19% points respectively.

In real terms, the Arts, Entertainment and Recreation activity grew by 3.48% year on year, which was higher than the rate recorded in Q2 2017 by 4.09% points, and higher by 3.18% points when compared with that of the preceding quarter. Quarter on Quarter, growth stood at –18.60% in real terms, lower than quarter-on-quarter growth recorded in Q1 2018 at 31.51%. Arts, Entertainment and Recreation contributed 0.23% to real GDP in Q2 2018, relatively same with the 0.23% recorded one year previous but lower than 0.29% recorded in the first quarter of 2018.

The INFORMATION AND COMMUNICATIONS sector in the second quarter of 2018 recorded a growth rate of 11.81% in real terms, year on year . From the rate recorded in the corresponding period of 2017, there was an increase of 12.96% points. Quarter on Quarter, the sector exhibited a growth of 13.02% in real terms. Of total real GDP, the sector contributed 13.63% in 2018 second quarter, higher than in the same quarter of the previous year in which it represented 12.37% yet higher than the preceding quarter, in which it represented 12.41%.

In real terms, the Transportation and Storage sector grew by 21.76% in Q2 of 2018. This rate represented an increase of 27.94% points relative to the same quarter of the previous year and also an increase of 7.31% points relative to the preceding quarter. Quarter on Quarter, growth was –10.43% in real terms. The contribution of the sector to real GDP in the second quarter of 2018 totaled 1.30%, an increase from 1.09% recorded a year previous but lower than 1.50% recorded in the first quarter of 2018.

The real year on year growth rate for ACCOMMODATION AND FOOD SERVICES sector in 2018 second quarter stood at 2.43%, higher by 6.49% points from –4.05% recorded a year previous. Relative to the preceding quarter , growth rate was 2.15% points higher from 0.29% recorded. Quarter on quarter real growth was –40.28%. The sector in second quarter of 2018 represented 0.64% of the real GDP, which is slightly higher than the contribution of 0.63% recorded in the second quarter of 2017 but lower than the first quarter 2017 contribution of 1.10%.

In the second quarter of 2018, the nominal year on year growth rate of Trade sector stood at –0.01%. This indicates a drop by –4.82% points when compared to the second quarter of 2017 but 2.11% points higher than the previous quarter. The quarter on quarter growth rate was 1.23%. Trade’s contribution to Nominal GDP in the second quarter of 2018 was 16.97%, lower than the contribution in the same quarter of the previous year of 19.27%, and the preceding quarter recorded at 18.08%.

The real growth rate of the construction sector in the second quarter of 2018 is recorded as 7.66% (year on year), higher by 7.54% points from the rate recorded a year previous. Relative to the preceding quarter, there was an incline of 9.20% points. Quarter on quarter, the sector grew by 14.92% in real terms. Its contribution to total real GDP is 4.51% in the current quarter; higher than its contribution of 4.25% in the same quarter of the previous year, also higher than in the immediate past quarter where it contributed 4.04%.

In real terms, the Electricity, Gas, Steam and Air Conditioning Supply sector grew by 7.59% in Q2 2018, a decrease from the growth rate of 35.50% recorded in the same quarter of 2017. When compared to the immediate past quarter, there was an increase of 2.66% points from 4.93% recorded. Quarter-on-Quarter, the sector grew at a rate of 141.61%. The contribution of this sector to real GDP in the quarter was 0.47%.

In real terms, the Mining and Quarrying sector grew by –3.84% (year-on-year) in the second quarter of 2018. Compared to the same quarter of 2017 and first quarter 2018, it is lower by –7.34% points and –18.68% points respectively. Quarter on quarter, growth rate recorded is –7.35% .The contribution of Mining and Quarrying to Real GDP in the quarter under review stands at 8.71%, lower than the growth rate of 9.19% and 9.67% recorded in the corresponding quarter of 2017 and the first quarter of 2018 respectively.

In real terms, the Administrative and Support Services sector recorded a growth rate of –3.41% (year-on-year), a decrease of –1.80% points from the corresponding quarter of 2017 and a decrease of –2.89% point from the rate recorded in Q1 2018. Quarter–on-Quarter, the sector grew by 0.51 % in Q2 2018. The sector’s contribution to real GDP was 0.02% in 2018 second quarter, roughly unchanged from the corresponding quarter in 2017 and 2018 first quarter .

Other Services real GDP grew by 2.72 % (year-on-year) in Q2 2018. This growth is higher by 0.39 % points than the growth recorded in the same period of the previous year, and higher by 0.48% points from Q1 2018. Quarter on Quarter growth was –22.73%. The sector contributed 3.16% to real GDP in Q2 2018 as against the 3.13% reported for the corresponding quarter of 2017 and the 4.21% recorded in Q1 2018.