Life in Nigeria is going to get tougher as the nation’s economy slide into recession for the second time under the government of President Muhammadu Buhari.
National Bureau ofStatistics (NBS) has confirmed that the nation’s economy has formally enteredinto recession as the Gross Domestic Product (GDP) contracted for the secondconsecutive quarter by 3.62 percent in the third quarter of 2020.
Economic recession is defined as twoconsecutive quarters of negative Gross Domestic Product (GDP) growth. NegativeGDP growth is also referred to as a contraction.
The National Bureau of Statistics, NBS, in itsGDP report for Q3’ 2020 said that the nation recorded GDP growth of -3.62% inQ3’ 2020, though an improvement from the -6.10% growth recorded in Q2’2020.
The NBS stated: “Nigeria’s gross domesticproduct (GDP) recorded a growth rate of –3.62% (year-on-year) in real terms inthe third quarter of 2020.
“Cumulatively, the economy has contracted by-2.48%. While this represents an improvement of 2.48% points over the –6.10%growth rate recorded in the preceding quarter (Q2 2020), it also indicates thattwo consecutive quarters of negative growth have been recorded in 2020.”
The NBS further stated: “Furthermore, growthin Q3 2020 was slower by 5.90% points when compared to the third quarter of2019 which recorded a real growth rate of 2.28% year on year.
“The performance of the economy in Q3 2020reflected residual effects of the restrictions to movement and economicactivity implemented across the country in early Q2 in response to the COVID-19pandemic.
“As these restrictions were lifted, businessesre-opened and international travel and trading activities resumed, someeconomic activities have returned to positive growth.
A total of 18 economic activities recorded positive growth in Q3 2020, compared to 13 activities in Q2 2020.” The NBS further explained that “During the quarter under review, aggregate GDP stood at N39.089 trillion in nominal terms.
This performance was 3.39% higher whencompared to the third quarter of 2019 which recorded an aggregate of N37.806trillion. “This rate was, however, lower relative to growth recorded in thethird quarter of 2019 by –9.91% points but higher than the proceeding quarterby 6.19% points.
For clarity, the Nigerian economy has beenbroadly classified into the oil and non-oil sectors.” On the performance of theoil sector, the NBS said: “The average daily oil production recorded in thethird quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpdlower than the average production recorded in the same quarter of 2019 and0.14mbpd lower than production volume recorded in the second quarter of 2020
“Real growth for the oil sector was –13.89%(year-on-year) in Q3 2020, indicating a sharp contraction of –20.38% pointsrelative to the rate recorded in the corresponding quarter of 2019.
Furthermore, real oil growth decreased by–7.26% points when compared with oil sector growth recorded in Q2 2020 (6.63%).Quarter on quarter, however, the oil sector recorded a growth rate of 9.64% inQ3 2020.
The sector contributed 8.73% to total real GDPin Q3 2020, down from 9.77% and 8.93% respectively recorded in the correspondingperiod of 2019 and the preceding quarter, Q2 2020.”
On the performance of the Non-oil sector, the NBS stated: “The non-oil sector grew by –2.51% in real terms during the reference quarter, which is –4.36% points lower than the rate recorded in Q3 2019 but 3.54% points higher than in the second quarter of 2020.
The non-oil sector wasdriven mainly by Information and Communication (Telecommunications), with otherdrivers being Agriculture (Crop Production), Construction, Financial andInsurance (Financial Institutions), and Public Administration.
In real terms, the non-oil sector contributed91.27% to the nation’s GDP in the third quarter of 2020, higher than its sharein the third quarter of 2019 (90.23% ) and the second quarter of 2020 (91.07%).”