Nigeria: Economic growth quickens to over four-year high in Q4 2019
The economy shifted into a higher gear in the final quarter of last year, with annual GDP growth accelerating from 2.3% in the third quarter to 2.6%—the strongest expansion since Q3 2015. Improved dynamics in the non-oil segment of the economy primarily drove the pick-up, while the outturn in the vital oil sector remained strong despite losing pace slightly. For the year as a whole, growth clocked in at 2.3%, up from 1.9% in 2018.
Growth of the non-oil sector climbed to 2.3% annually (Q3 2019: +1.8% year-on-year), largely on the back of quickening activity in the services sector. In particular, the information and communications industry, and especially the financial services sector, gained momentum in the quarter. Meanwhile, agricultural output held pace, underpinned by solid growth of the crop and fisheries sub-sectors. As for the industrial sector, growth moderated to 2.7% year-on-year (Q3 2019: +3.2% yoy), dragged down in large part by weaker construction output.
Meanwhile, the all-important energy sector expanded for the third consecutive quarter in Q4. That said, activity in the oil sector eased marginally, growing 6.4% over the same period of 2018 (Q3 2019: +6.5% yoy). Oil production, which accounts for the largest share of overall mining and quarrying sector output, dipped from a near four-year high of 2.04 million barrels per day (mbpd) in Q3 to 2.00 mbpd in Q4—accounting for the sector’s slight deceleration.
This year, although economic activity is seen gaining steam, overall growth is poised to remain only modest. Key risks to the outlook include high inflation; lingering trade tensions and the coronavirus outbreak dampening exports, particularly of oil; elevated unemployment; and the slow pace of structural reforms aimed at economic diversification.