Nigeria’s GDP Contracts 6.1% in Q2 2020

By Adedapo Adesanya

Nigeria’s Gross Domestic Product (GDP) contracted by 6.1 per cent in the second quarter of the year, a report from the National Bureau of Statistics (NBS) said on Monday morning.

In the Q2 2020 GDP Report published today, the agency said the country’s real GDP, which measures the value of economic output adjusted for price changes, contracted by over 6 per cent.

In the first quarter of this year, the nation’s economy grew by 1.87 per cent and also appreciated by 2.12 per cent in the same period last year.

The Q2 2020 growth rate indicated a drop of 8.22 per cent and a fall of 7.97 per cent when compared to the first quarter.

The decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

The domestic efforts ranged from initial restrictions of human and vehicular movements implemented in only a few states to a nationwide curfew, bans on domestic and international travel, closure of schools and markets etc., affecting both local and international trade.

According to the NBS, efforts led by both the federal and state governments evolved over the course of the quarter and persisted throughout.

Nigeria’s nominal GDP, which evaluates the economy at current market prices, during the period amounted to N34.02 trillion, while the real GDP stood at N15.89 trillion.

According to the report, the oil GDP contracted by 6.63 per cent in the period under review as against a rise of 5.06 per cent in the first quarter and 5.15 per cent in the Q2 2019.

Non-oil GDP also pointed south in the period by 6.05 per cent from the 1.55 per cent growth realised in Q1 2020 and 1.64 per cent in the same period in 2019.

In terms of their contributions, the oil sector contributed 8.93 per cent in the first quarter, lower than the preceding quarter’s 9.5 per cent while there was a rise in that of the non-oil sector, which rose to 91.07 in Q2 2020 from 90.5 per cent in Q1 2020.

Oil production in the second quarter dropped to 1.81 million barrels per day compared to 2.07 million barrels per day recorded in the first quarter. This came as a result of adherence to output reduction as instructed by the Organisation of the Petroleum Exporting Countries (OPEC) to help balance the oil market that has been affected by the coronavirus pandemic.

The sector contributions, the report revealed that the service sector made the highest impact with 53.49 per cent, followed by agriculture which contributed 24.65 per cent, while industries contributed 21.87 per cent in the quarter.

Business Post reports that if the economy contracts again in the present third quarter, Nigeria will officially fall into the second recession in four years.

In 2016, the country slipped into a recession and exited a year later and since then, it has not fully recovered.