Economy

Nigerian Economy Exits Recession: Implications and Policy Options

Published

9 years ago

14/09/2017

After five consecutive quarters of contraction in the Real Gross Domestic Product (GDP), the Nigerian economy exited the first recession in over two decades. The Q2, 2017 figures that the National Bureau of Statistics (NBS) released on Tuesday, September 05, 2017 shows that the GDP recorded a growth rate of 0.55%. The growth in the GDP was mainly due to the growth recorded in Agriculture, Financial and Insurance, Electricity, Gas, Steam and Air Conditioning Supply, and Mining and Quarrying sectors of the Nigerian economy.

The Oil sector, which grew by 1.64% in Q2, 2017, recorded the first growth since Q4, 2015. The growth in the Non-Oil sector at 0.45% in Q2 2017 decelerated from a growth rate of 0.72% recorded in Q1, 2017.

The Nigerian economy entered into a recession in Q2 2016 following two consecutive quarters of GDP contraction. The recovery in crude oil production and price and the introduction of the Investors’ and Exporters’ foreign exchange window, which increased the supply of foreign exchange to end users, helped to pull the economy out of recession.

We highlight policy options to sustain the growth and to ensure that the growth translates to development.

An analysis of the GDP by sectoral size shows that Agriculture, Trade, and Information and Communication are the three largest sectors of the economy and they contributed 22.97%, 17.1% and 12.39% respectively in Q2, 2017. Trade and Information and Communication contracted by 1.62% and 1.15% respectively. Although Agriculture grew by 3.01% in Q2, 2017, it recorded the lowest growth rate since Q1, 2015. The weak purchasing power in the country occasioned by high unemployment and inflation rates was the main driver of the contraction in the Trade sector.

The performance of the Information and Communication sector was due to the high cost of running communication equipment and services occasioned by the devaluation of the Naira in the face of a fixed tariff regime.

Meanwhile, the series of attacks in the crop producing regions in the country particularly in the Middle-Belt and the North, and the poor infrastructure in transportation and storage facilities led to the deceleration in the growth rate of the Agriculture sector.

The Real Estate sector, which contributed 7.22% to the GDP, also contracted by 3.53% in Q2, 2017 albeit at a much lower rate when compared with the contraction of 5.27% recorded in Q2, 2016.

The Manufacturing sector, which contributed 9.38% to the GDP, recorded a weak growth of 0.64% from a growth of 1.36% recorded in Q1, 2017. This was however a recovery compared with the contraction of 3.36% recorded in Q2, 2016.

There is the need for the Federal Government of Nigeria (FGN) to find a lasting solution to the attacks on farm lands in Nigeria in order to increase production. There should also be incentives in the form of tax reliefs and favourable land acquisition laws for the agro-allied industry in order to boost agriculture.

Additionally, there should be more focus on agricultural training and research institutes in the country to increase farm yields.

Concrete steps should be taken to involve the private sector in the provision of transport and storage facilities to reduce waste and give farm produce easy access to markets.

Government may also consider tax holidays and reduction to companies that make use of local agricultural raw materials in their production process. This will increase both human and material employment of local resources in Nigeria.

It is also important to allow for an adjustment in the communication tariff to boost investments and improve facility maintenance. In order to support the growth of real estate, government at all levels should partner with real estate developers, both local and foreign, to support the development of mass housing projects for low and middle income earners.

These housing units should be made available through long-term financing structures, which should be guaranteed by the government. This would provide both direct and indirect employment opportunities to Nigerians in real estate, construction and manufacturing sectors. In addition, it will help to protect the revenue of the government against the volatility in the oil industry and ultimately guarantee sustainable economic growth and development.

Economy

11 Plc, FrieslandCampina, CSCS Lift NASD Exchange by 1.38%

Published

22 hours ago

04/07/2026

Adedapo Adesanya

By Adedapo Adesanya

Three securities lifted the NASD Over-the-Counter (OTC) Securities Exchange by 1.38 per cent on Friday, July 3, with the NASD Security Index (NSI) up by 58.80 points to 4,307.26 points from 4,248.46 points, and the market capitalisation closing higher by N35.30 billion to N2.585 trillion from N2.549 trillion.

The price gainers were led by 11 Plc, which expanded by N20.05 to close at N220.55 per share compared with the previous day’s N200.50 per share, FrieslandCampina Wamco Nigeria Plc increased by N5.36 to N151.82 per unit from N146.46 per unit, and Central Securities Clearing System (CSCS) Plc appreciated by N3.52 to N90.74 per share from N87.22 per share.

Yesterday, the value of transactions surged by 1,431.2 per cent to N160.1 million from the preceding session’s N10.5 million, and the volume of trades rose by 303.7 per cent to 1.8 million units from 440,653 units, while the number of deals decreased by 34.4 per cent to 21 deals from 32 deals.

Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 70.7 million units transacted for N4.9 billion.

GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.

Economy

Nigerian Stocks Rebound by 2.19% to Halt Losing Streak

Published

23 hours ago

04/07/2026

Dipo Olowookere

By Dipo Olowookere

The losing streak on the Nigerian Exchange (NGX) Limited was halted on Friday after the bourse closed higher by 2.19 per cent at the close of trading activities.

The gains reported by Nigerian stocks were buoyed by renewed bargain-hunting by investors, which resulted in all the key sectors of Customs Street ended in the green territory.

The banking space rose by 2.78 per cent, the insurance counter appreciated by 1.26 per cent, the energy segment expanded by 0.36 per cent, the consumer goods index chalked up 0.06 per cent, and the industrial goods sector grew by 0.05 per cent.

Consequently, the All-Share Index (ASI) went up by 4,918.37 points to 229,240.34 points from 224,321.97 points, and the market capitalisation increased by N3.156 trillion to N147.103 trillion from N143.947 trillion.

Investor sentiment was bullish after 34 stocks ended on the price gainers’ chart and 18 stocks finished on the losers’ log, representing a positive market breadth index.

The quintet of The Initiates, Universal Insurance, DAAR Communications, Omatek, and Airtel Africa surged by 10.00 per cent to sell for N25.85, 88 Kobo, N1.65, N1.76, and N5,274.00, respectively.

On the flip side, International Energy Insurance lost 9.96 per cent to trade at N4.70, Meyer shed 9.95 per cent to close at N18.55, Veritas Kapital dropped 5.07 per cent to finish at N1.31, Fidelity Bank slipped by 2.17 per cent to N18.00, and Jaiz Bank crashed by 1.84 per cent to N28.12.

During the session, a total of 414.7 million equities worth N25.1 billion exchanged hands in 47,106 deals compared with the 855.4 million equities valued at N28.4 billion transacted in the preceding day in 51,609 deals, implying a contraction in the trading volume, value, and number of deals by 51.52 per cent, 11.62 per cent, and 8.73 per cent, respectively.

Economy

Naira Trades Flat at Official Market as CBN Makes Minimal FX Intervention

Published

23 hours ago

04/07/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira closed flat against the United States Dollar at N1,370.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 3.

However, it appreciated against the Pound Sterling in the same market segment by N2.29 to settle at N1,829.88/£1 compared with the previous day’s N1,832.17/£1, and marginally depreciated against the Euro by 4 Kobo to close at N1,568.32/€1 versus Thursday’s closing price of N1,568.28/€1.

At the parallel market, the Naira also traded flat against the US Dollar at N1,390/$1, and at the GTBank forex desk, it also maintained stability at N1,832/$1.

Market conditions improved shortly after the following minimal intervention by the Central Bank of Nigeria (CBN) through modest Dollar sales, which boosted liquidity and supported stronger trading activity.

Easing pressure came after half-year profit-taking tapered down, while continued stronger policy signals from the central bank add to near-term support.

Deals executed at the official market on Friday came in at $70.430 million across 82 interbank deals, from $85.517 million the previous day.

Meanwhile, the cryptocurrency market continued its recovery after June non-farm payrolls printed at 57,000, less than half the 113,000 consensus, sending the implied probability of a September Federal Reserve rate hike from 64 per cent to 54 per cent and dragging AI stocks sharply lower.

Weak labour data reduces inflationary pressure and, by extension, the Federal Reserve’s justification for holding rates elevated. That transmission mechanism is direct: lower rate-hike odds compress the opportunity cost of holding non-yielding assets like crypto.

Bitcoin regained the $62,000 mark after it rose by 1.3 per cent to $62,475.29.

Cardano (ADA) gained 6.6 per cent to trade at $0.1759, Ripple (XRP) appreciated by 3.5 per cent to $1.14, Ethereum (ETH) expanded by 2.4 per cent to $1,756.82, Dogecoin (DOGE) improved by 2.1 per cent to $0.0768, Solana (SOL) chalked up 1.8 per cent to $82.65, TRON (TRX) increased by 1.5 per cent to $0.3235, and Binance Coin (BNB) soared by 1.4 per cent to $569.12, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.