NIGERIA – Nigeria’s Gross Domestic Product (GDP) declined by 6.10% (year-on-year) in real terms in Q2 2020 against a background of a slowdown in the country’s critical sectors, data from the National Bureau of Statistics has shown.
According to the National Bureau of Statistics, the decline in Nigeria’s Gross Domestic Product (GDP) in Q2 2020 ended the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.
According to the numbers contained in the GDP report, the performance recorded in Q2 2020 represents a drop of 8.22% points when compared to Q2 2019 (2.12%), and 7.97% points decline when compared to Q1 2020 (1.87%).
According to the National Bureau of Statistics report, the significant drop reflects the negative impacts of the disruption caused by COVID-19 pandemic and crash in oil price on the Nigerian economy.
Furthermore, the latest GDP number shows that Nigeria’s oil sector recorded –6.63% (year-on-year) in Q2 2020, indicating a decrease of –13.80% points relative to the rate recorded in the corresponding quarter of 2019.
Similarly, the Nigeria’s non-oil sector declined by –6.05% in real terms during the reference quarter (Q2 2020), marking the first decline in real non-oil GDP growth rate since Q3 2017.
The contraction recorded in the non-oil sector was –7.70% points lower, compared to the rate recorded during the same quarter of 2019.
According to the NBS, the decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.
The report is coming at a time when the country is also facing stiff competition from US Shale oil producers in the international oil market.
The increased competition is threatening to significantly affect Nigeria’s ability to continue raising revenues from oil which is necessary in supporting other critical sectors of the economy.
Earlier this month, Africa Inc reported that United States had slashed oil imports from Nigeria by 12 million barrels of oil as a result of the country producing more and more oil from its Shale oil deposits.
This was particularly alarming as the North American country used to be the destination of at about 40 to 50 percent of Nigeria’s total crude oil exports.