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Business News

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. 

  • 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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Hospitality & Travel

KLM demands rapid antigen tests from Lagos passengers, as Netherland bans flights to UK, others

Passengers are to obtain rapid antigen tests at Murtala Mohammed International Airport before departure via Air France KLM Royal Dutch Airlines.

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KLM, Air France to resume flight operations in Nigeria from December 7

Air France KLM Royal Dutch Airlines has asked passengers departing from Lagos to obtain a rapid antigen test at Murtala Mohammed International Airport before departure from January 26, 2021.

This was disclosed by the Commercial Team Nigeria, Air France KLM Royal Dutch Airlines in its newsletter.

The airlines explained that customers, who are traveling to France as their final destination, now need to show a negative COVID-19 test result before boarding the aircraft and that the test result cannot be older than 72 hours and only PCR or LAMP tests are accepted.

Also, to fight against COVID-19, the Dutch government imposed flight ban to the United Kingdom, South Africa and South America.

It stated, “In addition, a second COVID-19 test will be required (rapid test – antigen) for all customers traveling to The Netherlands, including transfer customers.

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“No passengers will be allowed to board the aircraft without both the negative PCR test (72 hours before departure) and antigen test results (4 hours before departure) and will be rebooked accordingly. For now, all flights to/from U.K will be suspended until 27 January 2021.”

Steps to obtain rapid test

  • Antigen testing for passengers flying to The Netherlands including transfer customers need to be done as of 4
    hours prior to flight departure. In order to undergo the test, each passenger must complete a biodata form
  • The payment for the COVID-19 antigen test needs to be made via cash or card. The venue for sample collection is at the airport close to the check-in desks.
  • Rebook policy for mandatory PCR test: Customers that are not able to provide negative test results on time can take advantage of Air France and KLM PCR-test rebook policy.

What you should know

In December 2020, Nairametrics reported that KLM Royal Dutch Airlines and Air France resumed flight operations to Abuja and Lagos.

The airlines in a statement disclosed that international passengers can now fly Air France and KLM from Nigeria (Abuja and Lagos) to Paris and Amsterdam, with the possibility of further transfers to other European and North Atlantic destinations.

In a piece of travel advice, the airline asked customers to ensure they are well prepared for their trip and check the entry and travel requirements for their destination and transit countries in line with travel restrictions and governmental authorizations before making any travel plans. This is as the entry requirements may change with short notice.

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Tech News

Twitter acquires newsletter service, Revue

Twitter has acquired Revue, an email service that lets writers publish newsletters.

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Twitter Acquires Revue, A Newsletter Company

Twitter has acquired Revue, a Dutch startup that makes it free and easy for anyone to start and publish editorial newsletters. This is coming after a failed attempt to acquire Revue’s competition Substack.

Twitter has made massive moves over the past two months to acquire start-ups as it tries to expand beyond its core timeline product.

What they are saying

  • According to a blog post by Twitter VP of Publisher Products, Mike Park and Product Lead, Kayvon Beykpour, “Many established writers and publishers have built their brand on Twitter, amassing an audience that’s hungry for the next article or perspective they Tweet. Our goal is to make it easy for them to connect with their subscribers, while also helping readers better discover writers and their content. We’re imagining a lot of ways to do this, from allowing people to sign up for newsletters from their favorite follows on Twitter, to new settings for writers to host conversations with their subscribers. It will all work seamlessly within Twitter.

They added that Twitter will continue to operate Revue as a standalone product, with its team remaining “focused on improving the ways writers create their newsletters, build their audience and get paid for their work.”

  • “Revue will accelerate our work to help people stay informed about their interests while giving all types of writers a way to monetize their audience – whether it’s through the one they built at a publication, their website, on Twitter, or elsewhere,” the Twitter executives said.

They also said that bringing Revue to Twitter will supercharge this offering, helping writers grow their paid subscribers while also incentivizing them to produce engaging and relevant content that drives conversations on Twitter.

Twitter will make Revue’s Pro features free for all accounts and lower the paid newsletter fee to 5%, a competitive rate that lets writers keep more of the revenue generated from subscriptions.

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What you should know:

  • In December, Twitter bought Squad, a multi-participant video chat app, and this month it acquired the social broadcasting service, Breaker to create audio conversations for Twitter users. And now, they have added Revue to the collection of startups.
  • Revue was originally founded in 2015 in the Netherlands.
  • Twitter’s acquisition of Revue also places it in direct competition with Substack, a rival email newsletter service that has been growing in popularity recently.

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Coronavirus

Benue State Governor, Ortom tests positive for COVID-19

Benue State Governor has commenced treatment after testing positive for COVID-19.

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Governor Samuel Ortom of Benue State has tested positive for COVID-19.

This was disclosed by his Chief Press Secretary, Terver Akase, in a statement issued on Wednesday.

He stated, “This follows the test results of most of the Governor’s close aides who also returned positive in the last few weeks.

“Though the Governor has not shown any symptoms of the disease, he has already commenced treatment as prescribed by medical personnel.”

According to him, the governor has advised those who have come in contact with him in the last couple of days to go for a test.

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“The Governor says it is equally important that those who came in contact with other persons who have tested positive for the virus should go for a test to ascertain their COVID-19 status.

“Governor Ortom urged Benue people to continue to observe the protocols for the prevention of the virus such as wearing of face masks, use of sanitisers, regular hand washing and physical distancing,” he added.

What you should know

Some of the governor’s aides which included his personal physician, aide de camp, orderly, permanent secretaries among others had recently tested positive for the virus.

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