Nigeria’s Q4 GDP growth slows to 5.94% y/y despite oil sector recovery

By bne IntelliNews February 23, 2015

Nigeria’s real gross domestic product grew by 5.94% y/y in the fourth quarter, slowing from a 6.23% expansion in the preceding quarter, as a recovery in the oil sector could not offset a slower growth in non-oil GDP, data from the country’s National Bureau of Statistics (NBS) showed. In Q4 2013, the country’s GDP expanded by 6.77% y/y.

However, the West African country’s full-year GDP growth accelerated to 6.22% last year from 5.49% in 2013.

In Q4, the oil sector of Africa’s biggest oil producer recovered, posting a 1.18% y/y growth after a 3.6% y/y contraction in Q3. This came as the average daily crude oil production increased to 2.18mbpd from 2.15mbpd in Q3 and 2.16mbpd in Q4 2014. Oil exports account for about 70% of government revenues, but the country is troubled by widespread pipeline vandalism and oil theft, in addition to the oil price slump. The oil sector contributed 8.97% to real GDP in Q4, down from 10.45% in Q3.

On the other hand, growth in the non-oil sector decelerated to 6.44% in Q4 from 7.51% in Q3 due to a slowdown in agriculture (to 3.64% from 4.47%) and services (to 6.15% from 7.61%).

In q/q comparison terms, Nigeria’s GDP growth slowed sharply to 3.84% from 8.67% in Q4, as the agriculture sector contracted by 6.97% (+38.5% in Q3), and industry shrank 2.79% (+1.34% in Q3).

The services sector accounted for the largest share of real GDP in Q3 – 53.48%, followed by agriculture with a share of 23.86% and industry with 22.66%.

Nigeria’s nominal GDP (at basic prices) was estimated at NGN24.21trn ($121.2bn) in Q4.

Nigeria’s GDP growth is widely expected to slow this year (IMF: 4.8%, World Bank: 5.5%), reflecting weak oil prices, a sharp depreciation of the local naira currency, and political risks.

Real growth rate by sector Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Agriculture, y/y 2.46% 2.57% 3.44% 3.02% 5.53% 3.68% 4.47% 3.64%
Agriculture, q/q -29.12% 12.74% 37.48% -6.23% -27.39% 10.76% 38.53% -6.97%
Industry, y/y 1.82% 0.89% -0.10% 6.44% 4.84% 8.97% 5.43% 7.96%
Industry, q/q 12.55% -4.89% 4.73% -5.06% 10.86% -1.15% 1.34% -2.79%
Services, y/y 6.70% 8.95% 9.08% 8.72% 7.20% 6.54% 7.61% 6.15%
Services, q/q -9.26% 5.14% -0.48% 14.51% -10.53% 4.50% 0.51% 13.00%
Total, y/y 4.45% 5.40% 5.17% 6.77% 6.21% 6.54% 6.23% 5.94%
Total, q/q -9.41% 3.86% 8.99% 4.12% -9.88% 4.18% 8.67% 3.84%
Source: NBS                

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