Nigeria’s Q3 2017 GDP: Awoyemi, Rewane Raise Concerns Over Oil Induced Growth


Monday, November 20, 2017  3.00PM / Proshare WebTV 

The National Bureau of Statistics today announced that in Q3,2017 Nigeria’s Gross Domestic Product consolidated its exit from recession, by moving from the revised 0.7% in Q2, 2017 to 1.4% . 

This exceeds the World Bank projection of a 0.8% growth for  Nigeria in 2017, but seasoned financial analyst and economist Mr Olufemi Awoyemi and Mr Bismarck Rewane agree that the growth is oil induced. 

Both experts were guests on the Business Morning programme of Channels Television anchored by Boason Omofaye. 

Mr Olufemi Awoyemi CEO of Proshare noted that the economy recorded a significant real sector growth in the oil sector of 25.89%(year-on-year), which represents an increase of 48.92% relative to rate recorded in the corresponding quarter of 2018. He also identified the increase in oil production which is estimated to have  peaked to 2.03ml bpd barrels per day (mbpd), 0.15million barrels higher than the revised daily average production recorded in the second quarter of 2017 (revised from 1.84mbpd to 1.87mbpd). 

Awoyemi was concerned that the same factors that led Nigeria to recession (factors in oil production, oil price) is what is driving the current economic growth. 

He harped on the need for coherence in government policy to drive the economy towards the path of sustainability. 

On his part Mr Bismarck Rewane CEO of Financial Derivatives believed the 1.4% Q3, 2017 GDP growth was good, but dangerous because it was predicated on oil, which meant that Nigeria was still an oil-dependent economy. 

Rewane was of the view that Nigeria remained vulnerable to exogenous shocks, a position posited in a recent Moody report on the country. 

The Financial Derivatives CEO made a strong case for policy sustainability, which he believed was key but called on monetary policy makers to take a review of the interest rate regime in the country. 

From the analysis the Non-Oil sector grew by -0.76%, lower by 0.79% compared to growth rate recorded same quarter in 2016 and 1.20% point lower than in the second quarter of 2017. Growth was driven by Agriculture (Crop), Other services, and Electricity, gas, steam and air conditioning  supply. 

Nominal GDP for Nigeria was N29.83 trillion in Q3, 2017 while Real GDP stood at N18.03 trillion in the same quarter. 

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