Data from the National Bureau of Statistics (NBS) reveals Nigeria recorded a 1.92% Real GDP Growth for the 4th quarter of 2017 compared to 1.40% in the 3rd quarter of 2017 and a contraction of -1.73% in 4th quarter of 2016.
The NBS also reported that Nigeria’s annual GDP Growth rate (Q1-Q4 2017) was 0.82% compared to a contraction of -1.58% in 2016. This by all accounts is a significant improvement from a disastrous 2017 where the economy first went into a recession.
What we love about this result
Whilst the latest GDP growth rate is still paltry considering that an economy like Nigeria should be growing much faster, we did see items in the result that we consider sweet. Let’s look at a few;
Construction
This has been one sector that has suffered greatly from the fall in oil prices and the ensuing recession. The sector returned to growth in the 4th quarter of 2017, posting an impressive 4.14% growth. The construction sector fell into a double dip recession in the third quarter of 2017, after eking out growths in the first and second. However, the 4.14% growth was so good, the sector closed 2017 positively at 1%.
Services
This was another sweet story for us. After going through about 6 quarters of negative GDP growth rate and 3 cycles of recession, the sector eventually growth in the 4th quarter. The sector grew positive for the first time since Q1 2016 by 0.10% in Q4 2017 compared to contractions of -2.66% in Q3 2017 and -1.52% in Q4 2016
Non-oil GDP
The sweetest spot however was the overall growth in non-oil GDP. According to the report, Non Oil GDP grew by 1.45% in Q4 2017(strongest growth since 2015) compared to a contraction of -0.76 in Q3 2017 and -0.33% in Q4 2016. This is a huge sigh of relief considering that non-oil GDP makes up about 91% of GDP. With non-oil GDP now back to growth, we expect the country’s economic growth to move faster than it currently is. The presidency also identified the significance of this growth with the Vice President noted how important it is the economy.
“The other notable element of the data is that the non-oil sector experienced a strong growth of 1.45% in Q4 2017 as compared to a contraction in the previous quarter and the whole of 2016. This showing, the strongest since 2015, points to steady improvements across the economy. Also noteworthy in this regard were strong quarterly growth in crop production, crude oil production, metal ores, construction, transportation, trade, electricity and gas production.”
Here is a quick run down of some of the factors that contributed to the positive GDP numbers;
- GDP Growth in Q4 2017 was driven by growth in crop production, crude production and natural gas, metal ores, construction, transportation and storage, trade, electricity and gas production.
- Crop production grew 4.58% in Q4 2017 compared to 3.19% in Q3 2017 and 4.36% in Q4 2016
- Crude Production grew 8.38% in Q4 2017 compared to 25.89% in Q3 2017 and a contraction of -17.70 in Q4 2016
- Metal Ore grew 31.86% in Q4 2017 compared to 10.70% in Q3 2017 and 7.03% in Q4 2016
- Construction grew 4.14% in Q4 2017 compared to a contraction of -0.46% in Q3 2017 and another contraction of -6.03% in Q4 2016, representing the strongest growth in construction since Q2 2015
- Transportation and storage grew 16.57% in Q4 2017 compared to -6.25% in Q3 2017 and -5.32% in Q4 2016
- Trade, after 6 quarters of negative growth grew 2.07% in Q4 2017
- Electricity and gas production grew 16.03% in Q4 2017 compared to 11.46% in Q3 2017 and a contraction of -5.16% in Q4 2016
- Non Oil GDP grew by 1.45% in Q4 2017(strongest growth since 2015) compared to a contraction of -0.76 in Q3 2017 and -0.33% in Q4 2016
- Industry grew for the third consecutive quarter (following 8 quarters of negative growth) by 3.92% in Q4 2017 compared to 8.83% in Q3 2017 and a contraction of -8.73% in Q4 2016
- Services finally got out of recession, growing positive for the first time since Q1 2016 by 0.10% in Q4 2017 compared to contractions of -2.66% in Q3 2017 and -1.52% in Q4 2016.
