Thursday, September 28, 2017 8:00AM / United Capital
Over the past 35 years, the Nigerian economy expanded by more than 3x. The agricultural sector has contributed the most (about 27%) to this expansion relative to Oil & Gas (1.4%), Financials (3.3%), Manufacturing (9.0%) and Trade (18.8%).
Interestingly, the last time the sector contributed negatively to GDP was way back in 1987! In 2016, Nigeria fell into a recession that lasted for five quarters. By the end of the year, GDP had contracted by 1.6% y/y. The agricultural sector, however, sustained a positive momentum. Ex- Agric, GDP would have contracted by 2.5% in 2016 and would still be in a recession.
Evidently, it is safe to say that agriculture is the most important and resilient sector in the Nigerian economy, despite underwhelming investment in the sector by the federal government. The sector has withstood the “bubbles and bursts” of the wider economy, as its detachment from the negative effects of lower oil prices and currency illiquidity has been key to its sustained growth. Accordingly, we highlight the need for increased effort to boost activities in the sector in order to improve domestic economic output, export and government revenue amid a blurry long-term outlook for oil.
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