Nigeria's slower Q4-2015 GDP growth adds to pressure on both the monetary and fiscal authorities


Wednesday, March 09, 2016 09:48 AM / Cordros Capital

The National Bureau of Statistics (NBS) just released Nigeria's Q4-2015 GDP growth estimate. Real growth came in at 2.11% y/y, the lowest in 2015 and historically. Cumulatively therefore, economic growth in 2015 as a whole stood at 2.79%, 343bps lower than the 6.22% growth recorded in 2014.

A quick look at the breakdown of the growth figure shows that the oil sector recorded a negative growth of 8.3% y/y (from a 1.1% y/y growth in Q3-2015) while the non-oil component grew by 3.14% y/y (from 3.05% y/y in Q3-2015).

Compared to both the 2.84% y/y and 9.2% q/q growth recorded in Q3-2015, the Q4-2015 figure (+3.1% q/q) reflects a significant deterioration in economic performance in the last quarter of 2015, and contradicts the Monetary Policy Committee's (MPC) expectation for further improvement from the third quarter performance. 

The growth in Q4 also came below the conservative 2.78% y/y growth estimate earlier guided by the NBS (the Bureau published 2015 GDP estimate a month ago), and is expected to come as a concern to investors, taking into consideration the fact that recent data (we refer to our PMI report -- Nigeria's PMI: Second Month-on-Month Decline to Record Low Points to Slower Q1-2016 GDP Growth -- published yesterday) point to a difficult start to 2016.

This cumulatively adds to pressure on both the monetary and fiscal authorities to provide further decisive policy support to stimulate the economy in 2016.

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