Nigeria: Growth hits two-year high in Q4
March 1, 2018
Nigeria’s recovery gained speed in the fourth quarter, with growth hitting a two-year high. According to data released by the National Bureau of Statistics, GDP expanded 1.9% annually in Q4, above Q3’s 1.4% increase. The result brought full year growth to 0.8% in 2017, contrasting 2016’s sharp 1.6% drop in GDP. The economy exited recession last year thanks to higher oil production, improved exchange rate provision and higher energy prices, although activity remains modest.
The fourth quarter’s acceleration was due to faster growth in the non-oil sector. Non-oil sector activity expanded 1.5% annually in Q4, contrasting Q3’s 0.8% decrease. Behind the rebound, was a pick-up in the agricultural sector, which benefited from higher crop production. Meanwhile, performances across other sectors of the economy were lackluster with the industrial and services sectors losing steam from the third quarter.
Oil output averaged 1.91 million barrels per day (mbpd) in the fourth quarter, which was below the 1.91 mbpd recorded in Q3. Disruptions at oil production facilities were partly behind the lower output. Reduced production weighed on activity in the energy sector in Q4, however, higher oil prices helped growth to be solid overall. The oil sector expanded 8.4% annually in Q4, below Q3’s strong 25.9% increase.
Looking ahead, dynamics in the oil sector will be key to encouraging a faster recovery and higher oil prices should fuel stronger growth in 2018. However, still-high inflation, a weak business climate and security risks continue to cast a shadow over the country’s prospects.