Nigeria: Growth picks up to over three-year high in Q4
February 13, 2019
Nigeria’s recovery gained traction in the final quarter of 2018, with growth accelerating to an over three-year high. According to data released by the National Bureau of Statistics (NBS), GDP expanded 2.4% annually in Q4, well above Q3’s 1.8% increase. The acceleration was driven by the non-oil segment of the economy, while momentum within the oil sector remained weak. For the year as a whole, growth came in at 1.9%, picking up notably from the 0.8% expansion logged in 2017.
Growth in the non-oil sector of the economy accelerated in the fourth quarter, coming in at 2.7% annually (Q3: +2.3% yoy) and reflecting faster growth in the three major sectors. Activity in the agricultural sector picked up compared to Q3, mainly thanks to higher crop production. Similarly, the services sector gained steam, with growth hitting a multi-year high in Q4 largely on the back of buoyant activity in the information and communication industries. Moreover, industrial output rebounded from the previous quarter, owing to stronger gains in manufacturing production.
In contrast, the all-important energy sector continued to contract in the fourth quarter, although at a weaker pace than in Q3. Activity in the oil sector fell 1.6% over the same period last year, after tumbling 2.9% in Q3. Oil production—which accounts for the lion’s share of the overall mining and quarrying sector output—declined from 1.94 million barrels per day (mbpd) in Q3 to 1.91 mbpd in Q4 which, coupled with easing global oil prices throughout the quarter, weighed on the overall figure.
Looking ahead, growth is seen strengthening thanks to rising oil production and higher public spending. Uncertainty over the outcome of the upcoming presidential election—and its impact on economic policy-making going forward—cloud the outlook, however.
Nigeria GDP Forecast
FocusEconomics panelists project that the economy will grow 2.4% in 2019, down 0.1 percentage points from last month’s forecast. In 2020, growth is seen rising to 2.9%.
Author: Javier Colato, Economist