A new report released by the National Bureau of Statistics showed that Nigeria’s Gross Domestic Product (GDP) declined by 6.10% (year-on-year) in real terms in Q2 2020 – a strong hint that her economy may soon plunge into a severe economic recession, the worst since the 1980s.
The GDP report which shows the performance recorded in Q2 2020 indicated a drop of -8.22% points when compared to Q2 2019 (2.12%), and a fall of -7.97% points when compared to the first quarter of 2020 (1.87%), ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.
Oil sector nosedives
The latest GDP number shows that crude oil, the country’s prize commodity recorded 6.63% (year-on-year) contraction in Q2 2020, indicating a decrease of –13.80% points relative to the rate recorded in the corresponding quarter of 2019.
The Oil sector contributed a meagre 8.93% to total real GDP in Q2 2020, down from figures recorded in the corresponding period of 2019 (8.98%) and the preceding quarter (9.50%)
In the second quarter of 2020, an 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
Quarter-on-Quarter, the oil sector recorded a growth rate of –10.82% in Q2 2020.
Agriculture’s contribution to GDP rises by 24.5%
The agricultural sector contributed 24.6 per cent of the GDP in the second quarter of 2020, doing better than the previous quarter and the same quarter last year, which stood at 22.78 per cent and 21.96 per cent respectively.
The sector grew by 19.90 per cent year-on-year in nominal terms in Q2 2020, showing an increase of 2.14 per cent points from the same quarter of 2019. The contribution is higher than 19.39 per cent recorded in Q2 2019 but lower than 22.47 per cent of Q1 2020.
ICT contribution to GDP rises by 17%
National Bureau of Statistics – ICT Sector
the ICT sector has been one of the major contributors to Nigeria’s GDP since the beginning of the year. According to the report, the sector’s contribution grew higher by about 17.83% recording a positive growth rate of 15.09% from the 9.99% recorded in Q1 2020 and 9.01% in Q2 2019.
As a subsector, the Telecommunications and Information Services had a growth rate of about 18.10% almost doubling its 9.71% growth in the previous quarter.
Summary
Although Agriculture and ICT contribution for the quarter was significant, the drop in growth across most sectors shows that the unprecedented crisis requires an equally unprecedented policy response from the entire Nigerian public sector, in collaboration with the private sector, to lay the foundations for a strong economic recovery.