NIGERIA’S Gross Domestic Product (GDP) in real terms declined by -6.10 per cent (year-on-year) in Q2 2020, thereby ending the three-year trend of low but positive real growth rates recorded since the 2016/17 recession. This is according to the second quarter (Q2) GDP report, released by the National Bureau of Statistics (NBS) on Monday.
When compared with Q2 2019, which recorded a growth of 2.12 per cent, the Q2 2020 growth rate indicates a drop of -8.22 per cent (points), and a fall of -7.97 per cent (points) when compared to the first quarter of 2020 (1.87 per cent).
Consequently, for the first half of 2020, real GDP declined by -2.18 per cent year on year compared with 2.11per cent recorded in the first half of 2019. Apparently, the significant drop reflects the negative impacts of the disruption caused by COVID-19 pandemic and crash in oil price on Nigeria’s economy.
Also, the latest GDP number shows that Nigeria’s oil sector recorded –6.63 per cent (year-on-year) in Q2 2020, indicating a decrease of –13.80 per cent (points) relative to the rate recorded in the corresponding quarter of 2019.
In the second quarter of 2020, average daily oil production of 1.81 million barrels per day (mbpd) was recorded. This was -0.21mbpd lower than the daily average production of 2.02mbpd recorded in the same quarter of 2019, and -0.26mbpd lower than the first quarter 2020 production volume of 2.07mbpd.
Similarly, the non-oil sector declined by –6.05 per cent in real terms during the reference quarter (Q2 2020). This was the first decline in real non-oil GDP growth rate since Q3 2017. Nevertheless, non-oil sector output was driven by financial and insurance (financial institutions), information and communication (telecommunications), agriculture (crop production), and public administration, moderating Nigeria’s economy-wide decline.
On the other hand, sectors which experienced the highest negative growth included transport and storage, accommodation and food services, construction, education, real estate and trade among others. The GDP growth rate decline according to the NBS 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 movement 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.
The efforts, led by both the Federal and State governments, evolved over the course of the quarter and persisted throughout. Quarter on quarter, real GDP decreased by -5.04 per cent. Furthermore, only 13 activities recorded positive real growth compared to 30 in the preceding quarter.
In the quarter under review, aggregate GDP stood at N34,023,197.60 million in nominal terms, or 2.8 per cent lower than the second quarter of 2019 which recorded an aggregate of N35,001,877.95 million.