Improved oil export, controlled imports saved Nigeria from recession ― NBS

NATIONAL Bureau of Statistics (NBS) on Monday confirmed that Nigeria’s exit from its worst recession in almost 30 years was only due to improved condition in the oil sector and the control over general importation.

In the Nigerian Gross Domestic Product Report (Expenditure and Income Approach) 2017, NBS observed that “in summary, Nigeria’s economy exited the recession and slowly started its recovery in the second quarter of 2017, although improvements in domestic consumption and business environment are still necessary to further stimulate growth.

“Trade surplus in 2017 contributed significantly to overall economic growth and recovery

“Nigeria’s economy entered a recession in 2016 but returned to positive growth in the second quarter of 2017.”

In 2017, real GDP turned to positive growth in the second quarter and sustained its acceleration on a year-on-year basis.

Annual real GDP growth rate in 2017 was recorded at 0.82%, signifying economic recovery when compared to –1.58% in 2016.

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Some of the highlights of the report include that real household consumption and government consumption expenditures generally declined in 2017 at –0.99% but improved compared to 2016 (-5.71%).

It also explained that domestic demand was still weak; net exports grew significantly in real terms in 2017, which was mainly driven by the strong performance in the third quarter but added, however, this was slower than 2016 (22%).

In addition, national disposable income declined by 1.52% in 2017, majorly due to the continuous decline in the largest component— Operating Surplus which recorded a negative annual growth rate, of –2.11%; but Compensation of employees performed strongly in 2017, of an 11.14% annual growth rate compared to 2016.

Basic price GDP grew in real terms by 0.82% year-on-year in 2017. This was a significant improvement compared to a decline of -1.58% decline in real GDP growth rate in 2016.

Household final consumption in 2017 fell by -0.99% from 2016 in real terms, although it increased by 9.77% nominally.

The decline in real household consumption was an improvement on the –5.71% recorded in 2016. Weak household consumption growth indicates weak recovery of the domestic economy, while the nominal growth reflects the increase in prices over the year of 2017.

This component accounted for 58.93% of real GDP in 2017. In the first two quarters of 2017, real household final consumption recorded both year-on-year and quarter-on-quarter growth.

However, consumption declined sharply in the third quarter (-11.88%) in real terms on a year-on-year basis.

In the review year, general government expenditure accounted for 4.11% of gross domestic product (expenditure) in real terms, split between individual and collective consumption each of which accounted for 1.58% and 2.53% of GDP respectively.

Real government expenditure in 2017 fell by -7.99% over the preceding year, mainly caused by the decline in collective government consumption (a 10.41% decline rate in real terms).

This was slower growth when compared to double-digit growth recorded in 2016 (23.42% year on year) Real individual governmental expenditure in the first quarter recorded a year-on-year growth of 14.69%.

However, both individual and collective governmental consumptions in the following three quarters declined on a year-on-year basis.