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Nigeria’s GDP grew by 2.28% in Q3 2019, as border closure hits trade sector

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Q1 2020, Disrupting Nigerian banks, Evolution of Nigerian banks in 59-years , GTB, UBA, Zenith, Access Banks’ salary advance loans, Can a company operate without a website in 2019? , Banks refund N3.09 billion to customers over claims on excess charges, fraud, others  , Bank CEOs applaud NCC’s decision to suspend USSD charges, GTBank, Zenith, Access, FBN, 10 others spend over N8 billion on CSR, Banking: Evolving trends in the bankers’ market, GTBank, Access, FBNH, Standard Chartered wrestle over women entrepreneurs , GTBank, Access Bank, Zenith, FBN, 16 others disburse CBN’s N610.4 billion to farmers , Credit to government declines, as Credit to private sector hits N25.8 trillion, Banking sector NPLs down, loans up, Non-Performing Loans in Agriculture, construction, others rose to N143.76 billion, Asset seizure: Banks begins recovery of N6.125 trillion borrowed to the oil sector, Customer Experience: GTB, FCMB, Citibank, others emerge best banks in 2019, Nigeria’s top 5 banks spent more than N40 billion on adverts in 2019, Nigerian banks face risky future over low oil prices, coronavirus, Testing the financial strength of Nigerian banks

Nigeria’s Gross Domestic Product (GDP) grew by 2.28% in real terms, in the third quarter (Q3) of 2019, up from 1.81% growth recorded in the third quarter of 2018. This means there was a 0.47% point increase in the growth of the Nigerian economy (year-on-year).

According to the data released by the National Bureau of Statistics (NBS), the Nigerian economy grew by 2.28% in Q3 2019, up from 2.12% growth recorded in Q2 2019. This indicates an increase of 0.16% points between Q2 and Q3 2019 (Quarter on Quarter).

Growth overview: A quick breakdown shows that the Oil sector grew by 6.49% from the 7.17% growth recorded in the previous quarter. This means the oil sector grew at a slower rate.

  • On the other hand, non-oil GDP maintained a slow growth of 1.85% in Q3 2019, from 1.64% in the previous quarter. 
  • According to the report, Nigeria’s aggregate GDP stood at N37.8 trillion in nominal terms, an increase of 13.30% over the performance posted in Q3 2018. 

The Oil Sector: In Q3 2019, the oil sector of the Nigerian economy posted a strong performance with a 9.40% point increase relative to the rate recorded in the corresponding quarter of 2018. 

  • Notably, the oil sector grew high by 6.49% in the Q3 2019, as against -2.91% dip recorded in Q3 2018. However, the latest growth in the sector showed a dip when compared to 7.17% growth recorded in Q2 2019. 
  • In terms of contribution, the oil sector contributed 9.77% to total real GDP in Q3 2019, up from 8.98% recorded in the corresponding quarter. 

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The Non-Oil Sector: The report shows that Nigeria’s non-oil sector contracted in Q3 2019. The non-oil sector grew by 1.85% in real terms during the quarter under review. This was –0.48% points lower than the figure recorded in the same quarter of 2018 (2.32%), but a 0.20% point higher than the second quarter of 2019 (1.64%). 

  • During the quarter, the growth in the non-oil sector was driven mainly by sectors which include agriculture, Information and Communication, accommodation and food services, transportation and storage, 
  • In terms of contributions to GDP, the non-Oil sector remains the biggest contributor to GDP. 
  • The sector contributed 90.23% to the nation’s GDP, lower than the share recorded in the third quarter of 2018 (90.62%). 

Key Sectors’ performance: Major sectors that witnessed a decline in growth include trade sector and the real estate. Specifically, in real term, the trade sector contracted by -1.45% in Q3 2019, down from 0.98% in Q3 2018. The big contraction recorded in the sector may be largely attributed to the closure of the country’s land borders.  Recall, that Nigeria closed its land border in August 2019. 

  • Also, the real estate sector continued in its low ebb as it contracted by -2.31%, from -3.84% recorded in Q2 2019, and -2.68% in Q3 2018.
  • The industrial sector recorded the highest growth of 3.12% when compared with other sectors, followed by the agricultural sector which grew to 2.28%, while the service sector slowed down with a growth of 1.87%. 
  • On the other hand, the agricultural sector’s contribution to GDP improved to 29.25%, higher than the second quarter of 2019 which stood at 22.78%, this means that agriculture contribution in Q3 2019 rose by 6.46% points. 
  • The manufacturing sector grew by 1.10% in Q3 2019 from 1.92% in Q3 2018. This also means the sector slowed year-on-year. 
  • Also, the sector contribution to GDP stood at 8.74%, lower than the 8.84% recorded in the third quarter of 2018 and the 9.08% recorded in Q2 2019. 

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. 

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  • For the latest data, the economic growth of 2.28% shows an improved performance when compared to the third quarter of 2018 (1.81%). According to NBS, the improvement in GDP was likely aided by stability in oil output. 
  • However, the 2.28% GDP growth suggests the economy posted the biggest growth in the year.  
  • Meanwhile, the service sector recorded the slowest growth in the year. This is not good for the economy as the sector represents the largest contributor to the nation’s GDP.
  • On the positive side, the industrial sector posted the biggest growth for the past six quarters. 
  • Expectations are high for the Nigerian economy as the world bank’s 2.1% annual growth forecast for 2019 may eventually be surpassed.
  • Meanwhile, spill-over effects of the border closure may pose a further threat to the economy going into 2020.

 

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

2 Comments

2 Comments

  1. Carrington

    November 22, 2019 at 4:46 pm

    “This means the economy grew by 0.47% points (year on year).” This sentence is a bit misleading and inaccurate. It doesn’t mean the economy grew 0.47% YoY, it means that there was a 0.47 percentage points increase from the growth figure of Q3 2018 to Q3 2019. The economy grew 2.28% YoY! There is a huge difference between those two points; growth rate is higher this year (Q3) than last (Q3) by 0.47 percentage point vs the economy grew by 2.28% this year (Q3) in comparison to last (Q3)! 🙂 But in the rest of the article, you got it correct sha!

  2. Alfa

    November 30, 2019 at 7:19 am

    Contraction in trade sector, perhaps, suggests that border closure represents a drag on the Nigerian economy

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Coronavirus

Covid-19: US to have enough vaccines for vulnerable Americans by end of 2020

The US said it is likely to have enough safe and effective COVID-19 vaccines to inoculate Americans by the end of 2020.

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AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

The United States, On Wednesday, revealed that the country is likely to have enough safe and effective COVID-19 vaccines available to inoculate the most vulnerable Americans by the end of 2020.

The U.S. government is cautiously optimistic that one or two vaccines, likely from Pfizer Inc or Moderna Inc, will be available by the end of the year, and can begin to be distributed to Americans, officials said during a news conference.

This was disclosed by the United States Secretary of Health and Human Services, Alex Azar, on Wednesday, October 22, 2020.

Azar said he expected that all seniors, healthcare workers, and first responders would be able to receive vaccines as soon as January, with the rest of the American public able to get vaccines by April.

Companies participating in the U.S. government’s effort to develop vaccines for COVID-19, dubbed Operation Warp Speed, have begun developing manufacturing capabilities even before any vaccination has been authorized by regulators.

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Nairametrics had reported that in an open letter, the Chief Executive Officer of Pfizer Inc, Albert Bourla, disclosed that it could seek emergency use authorization of Covid-19 vaccine in the US by late November, after the US presidential election.

The coronavirus outbreak has been worsening in recent weeks as cold weather pushes Americans indoors, raising the chance of contracting the virus. Some 38 U.S. states and two territories have reported rising case counts. More than 8 million Americans have been infected with the novel coronavirus and more than 200,000 have died.

What this means: This announcement rules out the assertion by US President, Donald Trump, that a Covid-19 vaccine would be ready before the Presidential election. This is also a huge boost for the country, which has suffered the heaviest casualties globally from the pandemic.

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Business

IGP orders immediate withdrawal of police officers attached to VIPs

The IGP has ordered the immediate withdrawal of police officers attached to all VIPs across the country.

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The Inspector-General of Police (IGP), Mohammed Adamu, has ordered the immediate withdrawal of police officers who are attached to all Very Important Persons (VIPs) across the country.

According to media reports, those exempted from the IGP’s directive, are police officers attached to Government Houses, the Senate President, and the Speaker House of Representatives.

The directive was contained in a police wireless message dated October 21, 2020, that was sent virtually to Zonal Assistant Inspector General of Police and State Commissioners of Police with reference number, CB:4001/DOPS/SPU/FHQ/ABU/VOL./ORDER.

The statement said, “any commander who violates this order will bear the consequences.”

This is new directive is coming barely 10 days after the police authorities disbanded the Special Anti-Robbery Squad (SARS), following nationwide protests against the squad for high handedness and extrajudicial killings.

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The signal, which was signed by the AIG POL, Protect, Force Headquarters, Abuja, partly read, “Any protect personnel found escorting or guarding any VIP with or without a firearm is deemed to be deployed by the commander and the commander will be sanctioned.”

It further directed the affected personnel to report to their respective command Commissioners of Police.

It can be recalled that successive IGPs have issued similar orders in the past, which were barely implemented.

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In another development, the IGP has sent emissaries to the Chairman, Police Service Commission (PSC), Musiliu Smith, in a bid to have a smooth working relationship with the retired police boss.

It was gathered that two former IGs, Mike Okiro and Suleiman Abba; visited the PSC Chairman at his office in Abuja on Wednesday, following Smith’s refusal to meet with Adamu on several occasions.

A source explained that Okiro and Abba spent over three hours trying to persuade Smith to reconcile with the IG, who has been at loggerheads with the PSC over the recruitment of constables into the Nigeria Police Force.

What this means: This appears to be part of measures aimed at kick-starting the much talked about reforms in the Nigerian Police Force. The full implementation of this order will make more police officers available to provide security to Nigerians as a huge number of the force provides security to private individuals and companies, in a country that is greatly under policed.

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Coronavirus

COVID-19 Update in Nigeria

On the 21st of October 2020, 37 new confirmed cases were recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 61,667 confirmed cases.

On the 21st of October 2020, 37 new confirmed cases were recorded in Nigeria, having carried out a total daily test of 4,648 samples across the country.

To date, 61,667 cases have been confirmed, 56,880 cases have been discharged and 1,125 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 595,283 tests have been carried out as of October 21st, 2020 compared to 590,635 tests a day earlier.

COVID-19 Case Updates- 21st October 2020,

  • Total Number of Cases – 61,667
  • Total Number Discharged – 56,880
  • Total Deaths – 1,1125
  • Total Tests Carried out – 595,283

According to the NCDC, the 37 new cases were reported from 9 states – FCT (8), Lagos (7), Taraba (5), Rivers (5), Adamawa (4) Kaduna (3), Anambra (2), Osun (2), Ogun (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 20,733, followed by Abuja (5,943), Plateau (3,587), Oyo (3,421), Rivers (2,742), Edo (2,648), Kaduna (2,572), Ogun (1,987), Delta (1,812), Kano (1,741), Ondo (1,659), Enugu (1,314),  Kwara (1,050), Ebonyi (1,049), Osun (918), Katsina (904), Abia (898), Gombe (883).  Borno (745), and Bauchi (710).

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Imo State has recorded 607 cases, Benue (484), Nasarawa (478), Bayelsa (403),  Ekiti (329), Jigawa (325), Akwa Ibom (295), Anambra (277), Niger (274), Adamawa (248), Sokoto (162), Taraba (117), Kebbi (93), Cross River (87), Zamfara and Yobe (79), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

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The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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