GDP: Energy Sector Still In Recession 7 Quarters After Nigeria’s Exit

With crude oil theft rising exponentially and the electricity sector operating below capacity, the second quarter Gross Domestic Product(GDP), growth numbers have shown the energy sector still in recession.

The report is the country’s 7th consecutive quarterly GDP growth since her exit from recession in the fourth quarter of 2020.

The 3.54 per cent GDP growth in the second quarter of 2022, which represented the highest sectoral growth.

According the chief executive officer(CEO), of the Centre For The Promotion Of Private Enterprise(CPPE), Dr. Muda Yusuf, the report reflects the resilience of the Nigerian economy amid extreme macroeconomic challenges, galloping inflation, currency depreciation, foreign exchange illiquidity, high energy cost, heightened insecurity, weakening purchasing

power, structural bottlenecks and trade facilitation issues.

Analysing the report, Yusuf,  observed that the crude oil and gas, oil refining, textiles, electricity, gas and steam engines are still experiencing recession.

According to him, the real sector of the economy grew marginally as agriculture grew by 1.2 per cent manufacturing 3 per cent and construction 4.2 per cent.

The service sector growth outperformed the real sector, reflecting the sectoral variabilities in the constraints faced by investors in the economy.

Also, Air transport grew by 22.5 per cent, financial services 20 per cent ICT 7.71 per cent trade sector 4.5 per cent and real estate 4.4 per cent.

These were the sectors that posted positive growth in the second quarter of this year.

Yusuf, noted that many businesses are struggling to cope with the numerous challenges and shocks to the economy while the citizens are also experiencing serious economic hardship as a result of the galloping inflation and the impact on purchasing power.

Additionally, the Nigerian National Petroleum Company(NNPC), Limited, has reported huge crude oil theft and vandalization of oil facilities in the oil producing areas, estimating that the country loses two billion dollars monthly on account of oil theft. Loses are also suffered on account of vandalization of oil facilities, pipelines and the activities of illegal refineries.

Yusuf, also noted that productivity and competitiveness issues continue to impact negatively on the performance across sectors of the economy while the general operating environment continues to be very challenging for most investors.