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NBS: Nigeria’s GDP Grows By 1.5% To N16.58trn In Q2



Nigeria’s Gross Domestic Product (GDP) grew by 1.5 per cent year-on-year in real terms to N16.58 trillion in the second quarter of 2018, showing that the domestic economy expanded for the fifth consecutive quarter.

Growth in Q2 2018 was 0.79 per cent higher when compared to the second quarter of 2017 which recorded a growth of 0.72 per cent, but slowed by –0.45 per cent than 1.95 per cent recorded in the first quarter of 2018.

According to the second quarter GDP Report released by the National Bureau of Statistics (NBS) yesterday, growth in Q2 2018 was driven by developments in the non-oil sector as Services sector recorded its strongest positive growth since 2016.

Analysts have said the GDP figures released are positive and the country could see stronger figures if the economy continues on the growth trajectory. Although the GDP growth had been slower, analysts say the slow growth is not a cause for concern, asides the figures for agriculture.

According to the associate and team lead, Fixed Income at Afrinvest West Africa Limited, Jolomi Odonghanro, There was really no sad story except for agriculture which declined from a growth of about three per cent to 1.1 which represents the lowest since 2008.

He noted that the reforms in the second quarter of 2017 had spurred activities that drove a faster growth than what was recorded in the second quarter of 2018. “There was a marked moderation in the growth and it was expected. If you look at what was happening in the period last year it explains why there was a marked growth last year.

“It was around Q2 2017 that restrictions were lifted and it caused a lot of activities in the market. Besides the oil sector which the issues are well known. The story is quite positive, if all sectors keep it up we could be looking at stronger numbers going forward,” he stated.

Global Head of Currency Strategy & Market Research at FXTM, Jameel Ahmad, commenting on the GDP figures noted that the trend was not peculiar to Nigeria as a slower growth is being experienced not only in emerging markets but also China.

Noting that the initial reaction to the Nigeria GDP release appears to be one of mixed performance, he said “while the headline might be that growth slowed on a quarterly basis from 1.95 per cent to 1.5 per cent in Q2, the economy expanded on an annualized basis with growth close to 0.8 per cent. This is a positive result.

“The trend of slowing headline growth in emerging markets is something that is beginning to become more consistent in the financial news headlines. Away from Africa, Singapore, Malaysia and Indonesia have followed the same trend with recent GDP results while there are concerns that the Chinese economy could also be slowing.

“Emerging markets, in general, remain caught up in a multitude of different external headwinds, including higher US interest rates, prolonged volatility when it comes to the price of Oil and ongoing trade war concerns that represents a serious obstacle to emerging markets that rely heavily on global trade.’’

Managing director and chief executive of Cowry Assets Management Limited, Johnson Chukwu, attributed the slower growth in GDP figures to setback in oil sector. He said the setback in the oil sector was “due to lower volume and base effect, given that GDP growth in Q2 2017 was relatively high as the economy recovered from recession in the quarter.’’

The slow growth in agricultural sector he attributed to the incessant clashes between the suspected herdsmen and farmers in the north central of the country.