Nigeria’s Gross Domestic Product (GDP) grew by 1.94% in real terms, in the second quarter (Q2) of 2019, down from 2.10% growth recorded in the first quarter (Q1). This means the economy declined by 0.16% points in the quarter.
According to the data just released by the National Bureau of Statistics (NBS), the Nigerian economy grew by 1.94% in Q2 2019, when compared to the corresponding growth of 1.50% in Q2 2018. This indicates an increase of 0.44% points between Q2 2018 and Q2 2019 (year on year).
Growth overview: A quick breakdown shows that the Oil sector grew by 5.15% from contraction in the previous quarter, while Non-oil GDP slowed down by 1.64% in Q2 2019.
- According to the report, Nigeria’s aggregate GDP stood at N34.9 trillion in nominal terms, an increase of 13.83% over the performance posted in Q2 2018.
- In Q2 2019, a total of 15 activities grew faster in Q2 2019 relative to last year, while 13 activities had higher growth rates relative to the preceding quarter.
- For half-year 2019, real growth in the first half of 2019 stood at 2.02%, higher than the 1.69% which was obtainable in 2018.
The Oil Sector: In Q2 2019, the oil sector of the Nigerian economy posted a strong performance with a 9.10% point increase relative to the rate recorded in the corresponding quarter of 2018.
- Notably, the oil sector grew by 5.15% in the second quarter of 2019, as against the dip of -1.46% suffered in Q1 2019. This indicates an increase of 6.61% points in Nigeria’s oil sector.
- In terms of contribution, the oil sector contributed 8.82% to total real GDP in Q2 2019, up from 8.55% recorded in the corresponding quarter.
- However, the sector’s contribution to GDP went down when compared to Q1 2019.
The Non-Oil Sector: The Bureau’s report shows that Nigeria’s non-oil sector contracted in Q2 2019. The non-oil sector grew by 1.64% in real terms during the quarter under review. This was –0.40% points lower than the 2.05% recorded in the same quarter of 2018, and -0.83% point lower than the first quarter of 2019.
- During the quarter, the growth in the non-oil sector was driven mainly by sectors which include Information and Communication, Mining and Quarrying, Agriculture, Transportation and Storage, as well as Other Services.
- In terms of contributions to GDP, the non-Oil sector remains the biggest contributor to GDP.
- The sector contributed 91.18% to the nation’s GDP, lower than the share recorded in the second quarter of 2018 (91.45%), but higher than the first quarter of 2019 (90.78%).
Key Sectors’ performance: The growth of the Nigerian agricultural sector slowed down in the Q2 2019 when compared to Q1. Specifically, the sector grew by 1.79%, down from 3.17% posted in the previous quarter. This means the sector declined by –1.38% points.
- On the other hand, the agricultural sector’s contribution to GDP improved to 22.82%. Although this is lower than the contribution in the second quarter of 2018 (22.8%), it is higher than the first quarter of 2019 which stood at 21.89%.
- The manufacturing sector also contracted by –0.13% (year on year), lower than the corresponding quarter of 2018 and Q1 2019. The growth rate of the sector, on a quarter-on-quarter basis, stood at –4.41%.
- The manufacturing sector’s contribution to real GDP in Q2 2019 was 9.10%, which is lower than 9.29% recorded in Q2 2018 and 9.79% recorded in the first quarter of 2019.
- Overall, the nation’s industrial sector grew significantly at 2.01% in Q2 2019. This is the biggest growth the sector posted in six quarters.
- Meanwhile, the service sector also contracted, the sector grew at 1.94%, lower than 2.06% posted in Q1 2019, but higher than 1.46% growth recorded in Q2 2018.
The Key takeaways: GDP is Nigeria’s biggest economic data, and it measures the monetary value of everything produced in the country. It depicts the nation’s total economic activity. A decline in GDP means major economic activities are slow or sluggish, which may be a result of several factors.
- For the latest data, the economic growth of 1.94% shows an improved performance when compared to the second quarter of 2018 (1.50%). According to NBS, the slight improvement in GDP was likely aided by stability in oil output as well as the successful political transition.
- However, the 1.94% GDP suggests the economy behaved sluggishly within the quarter. Expectations were high for the economy to post a better growth performance from the 2.10% recorded in Q1 2019.
- Another downside is the agricultural sector. In the previous quarter, the agricultural sector posted the biggest growth across the major sectors. However, the sector dipped in Q2, slowest in 4 quarters.
- Meanwhile, the industrial sector posted some positives as it posted the biggest growth for the past six quarters.
#DigitalSkillsTraining: FG announces conclusion of selection process
Only successful applicants that are contacted by the Ministry are to report at the training venue.
The Federal Government through the Ministry of Youth and Sports disclosed that the selection process for the upcoming Digital Skills Training has been concluded for the #DigitalSkillsTraining from April 11th to 30th, 2021.
This was disclosed in a statement by the Ministry of Youth and Sport on Sunday evening.
“The Federal Ministry of Youth and Sports Development wishes to inform the general public and all Nigerian Youths that the selection process has been concluded for successful applicants for the #DigitalSkillsTraining scheduled for April 11 to 30, 2021,” the statement said.
The Ministry added that only successful applicants that were contacted by the Ministry are to report at the training venue. Those who were not successful but arrive at the training would not be admitted.
“Upcoming #DigitalSkillsTraining Programmes of the Ministry will be widely publicized on youthandsport.gov.ng , on : noya.ng and on the Ministry’s social media handles,” the statement added.
What you should know
Recall that Nairametrics reported in November 2020, that the Ministry of Youths and Sports Development announced it will scale up its digital skills training to cover 500,000 youths across the country after securing funding under the COVID-19 stimulus budget.
Cost of building materials rise by over 60% in one year
The price of building materials in the market experienced a rise of over 60% in the last one year.
The cost of Cement, Steel, Tiles and Plaster of Paris (PoP) cement, among others have risen by over 60% between March 2020 and March 2021.
For instance, the cost of steel, which was sold at N234,000 per tonne as of March 2020, had increased to N380,000 at the end of March 2021. This represents a 62% increase within the period under review.
While Dangote Cement increased from N2,600 to N3,800 (though it is sold at N3,600 in some areas in Lagos), Lafarge Cement and BUA Cement increased from N2,400 and N2,250 to N3,600 and N3,250 respectively within the same period.
The price hikes are not limited to the cost of steel and cement alone but also to other materials like Tiles, PoP cement, and roofing sheets.
The cost of super white cement increased from N2,500 (25kg) to N3,700, and the cost of high-quality white cement (40kg) also increased from N4,000 to N6,500.
The cost of gravel increased from N80,000 to N140,000; that of 8mm diameter and 25mm diameter (imported) increased from N234,000 and N245,000 to N330,000 and N380,000 respectively.
Doors are not left out in the hike. Costs of Flush door (high quality), Panel door and Turkish steel door (1,500 x 2,100) also rose from N35,000, N40,000, N165,000 to N60,000, N75,000 and N235,000 respectively.
Why the hike?
Industry experts have attributed the hike to persistent depreciation of the naira and the rising cost of other building materials.
Tunde Oluwole, a fellow of the Nigerian Institute of Builders, explained that the development was caused by high interest rate, inflation, increasing exchange rate and scarcity of forex in the country.
He said, “The increasing prices in Nigeria is a result of the combined effects of high-interest rates, devaluation of the naira, inflation, and non-effective distribution network of the materials.”
To Kolawole Adebisi, an Estate Developer, the development in the cement industry is caused by the ban of imported cement in the country.
He told Nairametrics that he is not against the ban, as the government’s intention is to boost local production of cement but explained that “the local manufacturers were unable to produce enough cement to meet the demand and this contributed to the rising cost of the product.”
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.
- MTN Nigeria raises N73.5 billion from CP Issuance to finance operations.
- Jaiz Bank proposes dividend worth N884 million for shareholders.