Monday, August 27, 2018 5.00PM / Proshare WebTV
The National Bureau of Statistics today released the Q2, 2018 Nigerian GDP report, which showed that the current growth rate is pegged at 1.50%, a -0.45% decline from the previous quarter (Q1, 2018) growth of 1.95%.
Slow Growth Momentum
From the analysis it is a slow momentum for the Nigerian economy, with a 1.50% Q2, 2018 GDP growth level, declining from the previous 1.95% in Q1,2018.
Apart from the slow growth, Nigeria still experiences the challenge of a nation with a population(2%) growing faster than its economy.
Oil Production at 1.84mbpd
The Oil sector accounts for over 90% of Nigeria’s foreign exchange and activities in the sector remain critical to the nation’s economy. From the Q2, 2018 GDP average daily oil production stood at 1.84mbpd a decline from 2.0mbpd of Q1, 2018.
As a sector it contributed 8.55% to total real GDP in Q2 2018, down from 9.61% in the preceding quarter of Q1, 2018.
Despite the steady rise in oil price $65.32 in January, 2018 to $76.98 in May and a dip to $74.44 per barrel in June, the most important concern has been the stability in the Niger-Delta region, which at the moment remains peaceful.
Non-Oil Sector the Driver
The Non-Oil sector in real terms contributed 91.45% to the nation’s GDP, a 0.06% from the previous quarter which was 90.39%. The Services sector played a major role in driving the performance of the “Non-Oil Sector” for Q2, 2018.
ICT & Construction Key Performers
An interesting analysis from the Q2, 2018 GDP report is that the Information and Communication Technology alongside the Construction sectors, emerged the key performers for the quarter in review.
The ICT sector recorded 11.81% growth while the Construction space on its part grew by the level of 7.9%.
Slow Pace for Manufacturing, Financial & Agric Sectors
The Manufacturing, Financial Services and Agric sectors which are vital to any economy in the globe, experienced slow pace of growth in Q2, 2018.
Manufacturing grew by 0.66%, while Financial Services & Insurance sector recorded 0.88% growth and the Agric sector’s growth was pegged at 1.19%.
This slow pace of growth calls for a proactive fiscal policy plan in Nigeria, that will incentivize investments and unlock opportunities for the manufacturing sector and boost the agriculture value chain in the country.
For the Financial Services & Insurance sector, innovation and an enabling regulatory envirionment will be key to drive growth.