Proshare WebTV Discourse on Q2, 2018 Nigeria GDP Report and Implications


Wednesday, August 29, 2018 7.00PM / Proshare WebTV

In the recent Proshare WebTV Economy discourse , Tope Babalola of the Economy desk  shared his perspective on the 1.50% Q2, 2018 Nigeria GDP report and the implications of what has been a “slow growth” momentum.

Babalola noted that despite the fact that the Nigerian economy was not in a recession, there was a deceleration in output, looking at the Q4, 2017 (2%), Q1, 2018 (1.95%) and the current growth rate of Q2, 2018 (1.5%) .

He identified three issues from the Q2, 2018 Nigeria GDP report published by the National Bureau of Statistics on Monday August 27, 2018;

1.Nigeria was  experiencing a negative output gap, considering the reality that it has been going far below its output capacity and that means there is a lot of capacity which is idle.

2.Nigeria was growing at 1.5% which  is below its population growth and affects per capital income

3.Nigeria growth at 1.5% constitutes a drag on the Sub-saharan Africa economy, considering its position as a major economy in the region.

The Analyst stressed that the non oil-sector grew  from 0.74 to 2.56% while oil sector production fell from 14% to -3%.

the oil produce per day fell from 2million to 1.84million and also in taking to consideration the price of oil end of the Q2 was also flip flopping compare to what it was in Q1.

Speaking on the sectoral performance, he observed that the ICT(11%)  and Construction (7.9%) while  sectors like manufacturing slowed at 0.66%, which in most economics is the driver of growth because of its link to jobs.

Tope was concerned about the slow growth of the agric sector at 1.19%, which constitutes a fifth of the whole economy. He also noted that there was   rebalancing with the non-oil-sector comprising  90.91% of the economy, while that of the oil sector was  8.87%.

According to him the oil sector there was a deterioration  in the output, while production fell from 2mbpd in Q1, 2018  to 1.84mbpd in Q2, 2018 alongside the volatility in crude oil price.

He called on the fiscal policy makers to be proactive in terms of  its programmes, projects, and plans that ensures a strong level of investments into the economy.

Looking at the oil sector he called for a stabilized policy, considering its role as the major  foreign exchange earner for the country.

For the monetary policy environment Babalola shared that it was restricted and with the reserves falling, had to be cautious, while  fiscal policy needs to come up to speed in to unlock  the structural gridlock.

Proshare Nigeria Pvt. Ltd.

 Proshare Nigeria Pvt. Ltd.

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