Tuesday, February 28, 2017 9:10 AM / NBS
Overview of GDP in Q4 2016
In the fourth quarter of 2016, the nation’s Gross Domestic Product (GDP) contracted by -1.30% (year-on-year) in real terms, from N18,533.75 billion in Q4 2015 to N18,292.95 billion in Q4 2016. This decline was less severe than the decline recorded in the previous quarter, of -2.24%, but was nevertheless lower than the growth rate recorded in the final quarter of 2015, of 2.11% (see Fig. 1). Quarter on quarter, real GDP increased by 4.09%, which partly reflects seasonal factors as well as a rise in the general price level.
For the full year 2016, therefore GDP contracted by -1.51%, indicating real GDP of N67,984.20 billion for the year. This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency, and problems in the energy sector such as fuel shortages and lower electricity generation.
Nominal GDP was N29,292,998.54 million at basic prices in the fourth quarter of 2016, which represents year on year nominal growth of 12.97%. In contrast to real growth, this is 5.84% points higher than the rate recorded in the same quarter of 2015, implying that the GDP deflator increased faster than the earlier period. For full year 2016, aggregate nominal GDP stood at N101,598,482.13 compared to N94,144,960.45.
The Nigerian economy can be more clearly understood according to the oil and non-oil sector classifications.
The Oil Sector
During the period under review, Oil production was estimated at 1.90million barrels per day (mbpd). This was 0.27million barrels per day higher than production in the previous quarter, but lower than production in the same quarter of 2015 by 0.25million barrels per day, when output was recorded at 2.16mbpd. (Figure2)
For the full year 2016, oil production was estimated to be 1.833mb/day, com-pared to 2.13mb/day in 2015. This reduction has largely been attributed to vandalism in the Niger Delta region. As a result, the sector contracted by - 13.65%; a more significant decline than that in 2015 of -5.45%. This reduced the oil sectors share of real GDP to 8.42% in 2016, compared to 9.61% in 2015.
In the fourth quarter of 2016 this sector declined by -12.38% in real term (year -on-year). This was an improvement relative to the previous quarter, when the sector declined by -22.01%, but nevertheless was a more severe decline than in the fourth quarter of 2015, when a contraction of -8.23% was record-ed. Quarter-on-Quarter, real oil GDP grew 8.07%. As a share of the economy, the Oil sector represented 7.15% of total real GDP, compared to 8.06% in Q4 2015 and 8.19% in Q3 2016 .
The Non-Oil Sector
The non-oil sector declined by -0.33% in real terms in the fourth quarter of 2016. This was 0.36% points lower than growth of 0.03% recorded in Q3 2016, and 3.46% points lower than the 3.14% growth recoded in Q4 2015. Given that the growth rate was stronger than in the oil sector, the non-oil sector increased its share of GDP to 92.85%, from 91.94% in the fourth quarter of 2015.
The sector to weigh on non-oil growth the most was Real Estate, which declined by -9.27% and contributed to –0.77% points to year on year growth in total real GDP. However, Manufacturing, Construction and Trade also made significant downwards contributions, ameliorated slightly by continuing strong growth in Agriculture (especially Crop Production).
For full year 2016, the non-oil sector declined by -0.22% in real terms, compared to a growth rate of 3.75% in 2015, a difference of 3.97% points.
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