After a sluggish start, Nigeria’s Gross Domestic Product (GDP) for the third quarter of 2019 recorded an impressive 2.28 per cent. Federal government’s policies to drive the economy may be unravelling, BENJAMIN UMUTEME reports.
Nigeria’s Gross Domestic Product (GDP) grew by 2.28 per cent (year-on-year), in real terms, in the third quarter of 2019. Compared to the third quarter of 2018 which recorded a growth of 1.81 per cent, it represents an increase of 0.47 per cent.The National Bureau of Statics (NBS) in its Nigerian Gross Domestic Product Report for Q3 2019, released in Abuja, noted that relative to the second quarter of 2019, which recorded a growth rate of 2.12 per cent, Q3 2019 represents an increase of 0.17 per cent. On a quarter on quarter basis, however, real GDP grew by 9.23 per cent representing the second highest quarterly rate recorded since 2016.
In the quarter under review, aggregate GDP stood at N37,806,924.41 million in nominal terms higher compared to the aggregate of N33,368,049.14 million recorded in third quarter 2018, representing a year on year nominal growth rate of 13.30 per cent.
The growth rate, however, is lower relative to rates recorded in the third quarter of 2018 by –0.28 percentage points and the rates recorded in the preceding quarter by –0.71 per cent.
Oil sector
In Q3 2019, Nigeria recorded average daily oil production of 2.04 million barrels per day (mbpd), which is its highest in more than three years.
This output was 0.1mbpd higher than the daily average production of 1.94mbpd recorded in the same quarter of 2018, and 0.02mbpd higher than the revised oil production levels in Q2 2019 of 2.02mbpd.
Real growth of the oil sector was 6.49 per cent (year-on-year) in Q3 2019 indicating an increase of 9.40 percentage points relative to rate recorded in the corresponding quarter of 2018.
The rate was lower by –0.68 per cent points when compared to Q2 2019 which was 7.17 per cent. Quarter-on-Quarter, the oil sector recorded a growth rate of 18.88 per cent in Q3 2019.
“The sector contributed 9.77 per cent to total real GDP in Q3 2019, up from figures recorded in the corresponding period of 2018 as well as the preceding quarter, when it accounted for 9.38 per cent and 8.98 per cent respectively,” the NBS stated.
Non oil sector
According to the report, non-oil sector grew by 1.85 per cent in real terms during the reference quarter. This is –0.48 percentage points lower when compared to the rate recorded in the same quarter of 2018 but 0.20 per cent points higher than the second quarter of 2019.
“During the quarter, the sector was driven mainly by the Information and Communication sector. Other drivers were Agriculture, Mining and Quarrying, Transportation and Storage, and Manufacturing. In real terms, the Non-Oil sector contributed 90.23 per cent to the nation’s GDP, slightly lower than the share recorded in the third quarter of 2018 (90.62%), and in the second quarter of 2019 (91.02%),” the statistics bureau further stated.
Sectoral breakdown
A further breakdown revealed growth in all sectors of the economy.
Agriculture
In real terms, the agricultural sector grew by 2.28 per cent (year-on-year) in the third quarter of 2019, an increase by 0.37 percentage points from the corresponding period of 2018, and 0.49 per cent points from the preceding quarter which recorded a growth rate of 1.79 per cent.
In terms of contribution, the sector contributed 29.25 per cent to overall real GDP during the quarter, same as contribution in the third quarter of 2018 but higher than the second quarter of 2019 which stood at 22.78 per cent. Compared to the second quarter of 2019, the contribution in Q3 2019 rose 6.46 percentage points.
Mining
In real terms, the Mining and Quarrying sector grew by 6.19 per cent (year-on-year) in the third quarter of 2019.
Compared to the same quarter of 2018, it was higher by 9.00 percentage points and lower by –0.82 percentage points relative to second quarter 2019. Quarter on quarter, growth rate recorded was 18.50 per cent.
The contribution of Mining and Quarrying to Real GDP in the quarter under review stood at 9.90 per cent, higher than the rate of 9.53 per cent, recorded in the corresponding quarter of 2018 and the 9.12 per cent recorded in the second quarter of 2019.
Manufacturing
Real GDP growth in the manufacturing sector for Q3 2019 was 1.10 per cent (year on year), –0.83 percentage points lower than the same quarter in 2018 but higher than the preceding quarter by 1.23 percentage points.
On a quarter on quarter basis, the sector grew 5.14 per cent, higher than the quarter on quarter growth rate recorded in the preceding quarter of 2019. The sector contributed 8.74 per cent to real GDP in Q3 2019, lower than the 8.84 per cent recorded in third quarter of 2018 and the 9.08 per cent recorded in Q2 2019.
Construction
The real growth rate of the construction sector in the third quarter of 2019 was recorded at 2.37 per cent (year on year), higher by 1.83 percentage points from the rate recorded a year previous. Relative to the preceding quarter, there was an increase of 1.71 percentage points. Quarter on quarter, the sector grew by –25.99 per cent in real terms, lower (by –38.11% points) than the 12.12 per cent it recorded in the second quarter of 2019.
Its contribution to total real GDP was 3.01 per cent in the current quarter; same as its contribution in the same quarter of the previous year, but lower than in the preceding quarter where it contributed 4.45 per cent.
Experts react
A former President, Association of National Accountants of Nigeria, Dr Samuel Nzekwe, said the agriculture sector could have been the driver of the growth.
He said since the closure of Nigeria’s border, most goods were not coming in, and activities in the agriculture sector rose.
Nzekwe said, “The other growth areas may be construction industry because a lot of construction is going on now. In the manufacturing sector, however, I don’t think I have seen any reasonable growth in that area because of infrastructure problem – no light and without light, you cannot do much.
“In real terms, we don’t see the growth or the impact of the GDP. Unemployment is still there; the industries are not working. Even in the agriculture sector, insecurity is not allowing enough activities because of kidnapping and other challenges.”
But for Director-General, Chartered Insurance Institute of Nigeria, Mr Richard Borokini, said the growth in the third quarter in 2018 and 2019 period could be attributed to oil price and exchange rate, which had been stable.
“This could have had a positive effect on the production of the manufacturing sector,” he said.
However, for public affairs commentator, Cobham Nsa, the third quarter GDP growth as released by the NBS is an indication that policies of the present administration is working.
According Nsa, due to the closure of the borders and government’s deliberate effort in the agricultural sector people are now looking inwards.
He said: “While some people will be complaining about the border closure rice farmers and other are smiling to the bank and this one of the reasons for the GDP growth.
“Also, when you go to Aba, the people ate very busy trying to meet demand for request for the end of season sales which would not have been possible if Nigeria’s land borders were open.”
He went further to ask rhetorically, “Is the issue of kidnapping and herdsmen attack still as rampart as it was before the close of the borders? He believes with time and patience, Nigerians will see the result of some of government’s economic policies.
