NIGERIA’s gross domestic product (GDP) grew by a meagre 2.28% during the third quarter of 2019 when compared with last year according to figures just released by the National Bureau of Statistics (NBS).
In its latest quarterly GDP report, the NBS said the real GDP growth rate in the third quarter of the year indicated an increase of 0.17 percentage points compared with a 2.12 growth rate recorded in Q2 2019. Also, according to the report, Nigeria recorded an average daily oil production of 2.04m barrels per day during the quarter, representing the highest figure in more than three years.
“The growth rate in the third quarter of 2019 represents the second-highest quarterly rate recorded since 2016. This output was 0.1m barrels per day (bpd) higher than the daily average production of 1.94m bpd recorded in the same quarter of 2018,and 0.02m bpd higher than the revised oil production levels in the second quarter of 2019 of 2.02mbpd,” the NBS report added.
According to the NBS, aggregate GDP stood at N37.81tn in nominal terms in the third quarter, compared with the N33.37tn recorded in the third quarter of 2018, representing a year-on-year nominal growth rate of 13.30%. Its report said the growth rate is, however, lower relative to rates recorded in the third quarter of 2018 by 0.28 percentage points and the rates recorded in the preceding quarter by 0.71 percentage points.
In September, the NBS said that Nigeria’s GDP growth rate fell to 1.94% in the second quarter of this year from 2.10% in the first quarter. In June, global credit rating agency, Fitch Ratings, said that the Nigerian economy would continue to experience a sluggish recovery, predicting that the GDP growth would average 2.2% in 2019/20, below its previous 10-year average of 4.2% and the current B median categorisation of 3.4%.
According to Fitch Ratings, high unemployment and inflation would constrain private consumption while investment has been held back by tight credit supply, a weak business climate and regulatory uncertainty in the oil sector. Another rating agency, Moody’s Investors Service, also said in June that Nigeria was trapped in a low growth path for the time being.
Aurelien Mali, Moody’s vice president, said government revenue weakness remained a key credit challenge, adding that Nigeria’s balance sheet had deteriorated to a worrisome level. At the moment, over 90% of government revenue comes from crude oil exports and Nigeria has one of the lowest tax-to-GDP ratios in the world of just 6%.