By Modupe Gbadeyanka
The Nigerian economy shrank further by 2.24 percent year-on-year in the third quarter of 2016 as Niger Delta militants continue their attacks on oil installations in the oil rich region of the country, which have caused a huge fall in crude oil production, Nigeria’s main foreign exchange earnings.
The third quarterly contraction in a row also comes as Nigeria rolls from a crash in global oil prices, which have collapsed from over $100 a barrel in 2014 to currently around half that.
According to data released on Monday by the National Bureau of Statistics (NBS), Nigeria’s oil production averaged 1.63 million b/d in Q3, lower than the average 1.69 million b/d output in Q2, and 25 percent lower than the 2.17 million b/d production a year ago.
The NBS noted that, “The nation’s gross domestic product (GDP) contracted by -2.24 percent year-on-year in real terms.”
It also said, “As a result, real growth of the oil sector slowed by 22.01 percent (year-on-year) in the third quarter of 2016. As a share of the economy, the oil sector contributed 8.19 percent of total real GDP, down from figures recorded in the corresponding period of 2015 and the preceding quarter of 2016 recorded at 10.27 percent and 8.26 percent respectively.”
Data from the NBS also noted that manufacturing has taken a big hit, shrinking by 2.9 percent in the third quarter in the wake of a devalued naira and currency controls that have curbed trade.
“This is partly due to the continued fall in the exchange rate, which makes imported inputs more expensive, thereby increasing business costs,” the NBS explained, adding that, ‘This is greatly a result of the continued fall in (the) naira to dollar rate which translates to much higher cost of business operations.”
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