Gross Domestic Product (GDP) expanded 1.87 per cent in the three months through March from a year earlier, compared with growth of 2.55 per cent in the previous quarter, the Abuja-based National Bureau of Statistics said on its website Tuesday. The slowdown reflects “the earliest effects of the disruption, particularly on the non-oil economy,” the statistics office said. The median estimate of three economists in a Bloomberg survey was for 0.8 per cent expansion. GDP contracted by 14.27 per cent from the fourth quarter.
While crude prices started dropping in the first quarter due to the tension between some of the world’s biggest producers and the coronavirus outbreak, Nigeria ramped up production to compensate for the fall in income. Oil output rose to 2.07 million barrels a day, compared with 2 million in the fourth quarter and 1.99 million barrels in the first quarter of last year. That’s the highest level since at least the start of 2016.
The oil sector grew by 5.06 per cent from year earlier and the non-oil growth rate dropped to 1.5 per cent,, compared with 2.47 per cent a year earlier. Still, the plunge in crude prices will weigh on Africa’s largest economy this year and gross domestic product could contract 3.4% in 2020, the most in at least four decades, according to the International Monetary Fund (IMF).
Oil contributes less than 10 per cent to GDP, but it accounts for half of the government’s income and about 90 per cent of Nigeria’s foreign-exchange earnings. Africa’s biggest crude producer has more than halved the benchmark price in its budget to $25 per barrel for 2020 while keeping spending targets mostly intact, a step which would mean more borrowing to finance the fiscal plans.
