Inflation, Oil theft cut economic activities in Nigeria as Q2 2022 GDP falls to 3.54%

The rising rate of inflation in Nigeria and a sharp drop in crude oil production caused by pipeline vandalism and oil theft have culminated in a decline in the Gross Domestic Product (GDP) growth rate to 3.54 per cent in the second quarter (Q2 2022) of this year.

This is contained in the National Bureau of Statistics (NBS) second-quarter GDP report released on Friday in Abuja, which states that Nigeria’s economy grew 3.54 per cent in the second quarter, slower than the 5.01 per cent recorded in the same period last year.

According to the NBS report, the 3.54 per cent Q2 2022 GDP represents a decline when compared to the 5.01 per cent recorded in the second quarter of 2021 despite the negative impact of the COVID-19 pandemic on the Nigerian economy.

In its overview of GDP in Q2 2022, the NBS said “Nigeria’s Gross Domestic Product (GDP) grew by 3.54% (year-on-year) in real terms in the second quarter of 2022.

“This growth rate declined from 5.01% in the second quarter of 2021 when rapid growth was recorded following the toll the COVID-19 pandemic exacted on the economy in Q2 2020.

“In addition, the recent rising prices have adversely impacted the second quarter 2022 performance.

“The Q2 2022 growth rate decreased by 1.47% points from the 5.01% growth rate recorded in Q2 2021 and increased by 0.44% points relative to 3.11% in Q1 2022.

“However, quarter-on-quarter, real GDP grew at -0.37% in Q2 2022, reflecting lower economic activity in Q2 2022
then in the preceding quarter.

“In the quarter under review, aggregate GDP stood at N45,004,520.89 million in nominal terms. This
performance is higher when compared to the second quarter of 2021 which recorded aggregate GDP of N39,123,713.32 million, indicating a year-on-year nominal growth rate of 15.03%.

“The nominal GDP growth rate in Q2 2022 was higher relative to the 14.99% growth recorded in the second quarter of 2021 and higher compared to the 13.25% growth recorded in the preceding quarter. For better clarity, the Nigerian economy has been classified broadly into the oil and nonoil sectors”.

Further breakdown of the NBS report shows that the urban inflation rate rose by 2.08 per cent to 20.09 per cent in July 2022 from 18.01 per cent recorded in July 2021, while the rural inflation rate hit 19.22 per cent from 16.75 per cent recorded in the corresponding period under review.

The inflation rate in Nigeria stood at 19.64 per cent in July this year, the highest in the last 17 years. The last time inflation in the country was above 19.64 per cent was in September 2005 when it peaked at 24.32 per cent.

Increases in the food and core index drove the uptick in the inflation rate.

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