By Tanko Momoh
The National Bureau of Statistics (NBS) has released its second quarter economic assessment of Nigeria, revealing that the country’s Gross Domestic Product (GDP) declined by –6.10 per cent (year-on-year) in real terms.
According to the Nigerian Gross Domestic Product Report (Q2 2020) published on the NBS website on August 24, 2020, the decrease in GDP ended the three-year trend of low but positive real growth rates recorded since the 2016 and 2017 recession.
The decline was largely attributed to significantly lower levels of both domestic and international economic activities during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.
The domestic efforts ranged from initial restrictions of human and vehicular movement implemented in only a few states to a nationwide curfew, bans on domestic and international travel, closure of schools and markets, among others.
These efforts, according to NBS, affect both local and international trade.
The efforts, led by both the Federal and State governments, evolved over the course of the quarter and persisted throughout.
When compared with the second quarter of 2019, which recorded a growth of 2.12 per cent, the second quarter of 2020 growth rate indicated a drop of –8.22 per cent points.
The rate also showed a fall of –7.97 per cent points compared to the first quarter of 2020 (1.87 per cent).
Consequently, for the first half of 2020, real GDP declined by –2.18 per cent year on year, compared with 2.11 per cent recorded in the first half of 2019.
Quarter on quarter, real GDP decreased by –5.04 per cent.
Furthermore, only 13 activities recorded positive real growth compared to 30 in the preceding quarter.
In the quarter under review, aggregate GDP stood at N34,023 million in nominal terms, or -2.8 per cent lower than the second quarter of 2019 which recorded an aggregate of N35,001,877.95 million.
Overall, the nominal growth rate was –16.81 per cent points lower than recorded in the second quarter of 2019, and –14.81 per cent points lower than recorded in the first quarter of 2020.
According to the report, the Nigerian economy has been classified broadly into the oil and non-oil sectors.
An average daily oil production of 1.81 million barrels per day (mbpd) was recorded in the second quarter of 2020.
This was -0.21mbpd lower than the daily average production of 2.02mbpd recorded in the same quarter of 2019, and –0.26mbpd lower than the first quarter of 2020 production volume of 2.07mbpd.
Real growth of the oil sector was –6.63 per cent (year-on-year) in the second quarter of 2020 indicating a decrease of –13.80 per cent points relative to the rate recorded in the corresponding quarter of 2019.
Growth decreased by –11.69 per cent points when compared to the first quarter of 2020 which recorded 5.06 per cent.
Quarter-on-Quarter, the oil sector recorded a growth rate of –10.82 per cent in the second quarter of 2020.
The oil sector contributed 8.93 per cent to total real GDP in the second quarter of 2020, down from figures recorded in the corresponding period of 2019 and the preceding quarter, where it contributed 8.98 per cent and 9.50 per cent respectively.
Furthermore, the non-oil sector declined by –6.05 per cent in real terms in the second quarter of 2020 which was the first decline in real non-oil GDP growth rate since the third quarter of 2017.
The recorded growth rate was –7.70 per cent points lower compared to the rate recorded during the same quarter of 2019, and –7.60 per cent points compared to the first quarter of 2020.
Nevertheless, non-oil sector output was driven by financial and insurance (financial institutions), information and communication (telecommunications), agriculture (crop production), and public administration which moderated the economy-wide decline.
On the other hand, sectors which experienced the highest negative growth included transport and storage, accommodation and food services, construction, education, real estate and trade, among others.
In real terms, the non-oil sector accounted for 91.07 per cent of aggregate GDP in the second quarter of 2020.
The figure is slightly higher than the share recorded in the second quarter of 2019 which was 91.02 per cent and also the first quarter of 2020 which was 90.50 per cent.
