Illustrative picture. PHOTO CREDIT: SHIPS & PORTS archive
Nigeria’s Gross Domestic Product (GDP) grew by 1.87% on a year-on-year basis in the first quarter of 2020 despite many economic contractions around the world, a new by National Bureau of Statistics report has shown.
The performance recorded represented a contraction of 0.23 per cent compared to Q1 2019 and a contraction of 0.68 per cent compared to Q4 2019.
The growth was despite the decline of crude prices since the first quarter of 2020 due to the coronavirus outbreak. But when compared to the previous quarter, the economy shrunk from 2.55% to 1.87%.
“Quarter on quarter, real GDP growth was –14.27% compared to 5.59% recorded in the preceding quarter,” the report said.
In Q1 2020, aggregate GDP stood at N35,647,406.08 million in nominal terms. This performance was higher when compared to the first quarter of 2019 which recorded N31,824,349.67 million, with a nominal growth rate of 12.01% year on year, NBS said.
NBS in its report on Monday said the fall reflects “the earliest effects of the disruption, particularly on the non-oil economy.”
The economy, heavily dependent on oil revenue, is projected to contract by 3.4 percent this year, Nigerian Government said in May.
According to the International Monetary Fund, the contraction might be the most in at least four decades.
Finance Minister Zainab Ahmed said in March that this year’s record 10.59 trillion naira budget would be cut by about 15 percent. At that time, she said the initial assumed oil price of $57 a barrel would be reduced to a worst-case scenario of $30 a barrel.
Ahmed later said that benchmark would again have to be revised down.
To beat this plunge, Nigeria ramped up production of oil output by 2.07 million barrels a day, compared with 2 million in the fourth quarter and 1.99 million barrels in the first quarter of last year.
The oil sector grew by 5.06% from year earlier and the non-oil growth rate dropped to 1.55%, compared with 2.47% a year earlier.
But despite efforts by the Nigerian Government, recession is inevitable.
Ahmed, had projected the economy to shrink by 8.9% in the worst case scenario, but said that the economy could shrink by 4.4% in the best case scenario.
However, she said with stimulus and necessary measures, the contraction could be reduced to 0.59.