On Tuesday, the National Bureau of Statistics (NBS) released the Gross Domestic Product (GDP) figure for 2017. According to the report, Nigeria’s economy grew by 0.83 percent representing a positive growth from the 2016 figure of -1.58 percent. Although this is a positive growth rate, it is very small for a country like Nigeria that has a lot of economic activities going on regularly. According to research, Nigeria’s highest GDP growth rate remains 14.6 percent, which was recorded in 2006.
However, in the fourth quarter of 2017, Nigeria recorded its best performance since exiting recession in the second quarter of 2017. The economy grew by 1.92 percent compared to a contraction of -1.73 percent of the same quarter in 2016.
The major contributors to Nigeria’s economic growth in 2017
According to NBS, the report the non-oil sector contributed 92.83 percent to the growth of the GDP as opposed to the oil sector, which contributed 7.10 percent.
The oil sector
According to the report, the oil sector contributed more in 2017 compared to 2016. Its contribution grew by 8.68 percent compared to 8.35 percent recorded in 2016. In the fourth quarter of 2017, oil production averaged at 1.91million barrels per day (mbpd), which is -0.12mbpd lower than the third quarter of production recorded in the same period of 2016.
The non-oil sector
The Non-Oil sector contributed 91.32 percent to GDP in 2017 and 91.65 percent in 2016 but in the fourth quarter of 2017, it contributed 92.83% to the nation’s GDP. This is lower than 93.25 percent recorded in the fourth quarter of 2016 but higher than the 89.96 recorded in the third quarter of 2017.
The construction sector grew by 4.14 percent in the fourth quarter of 2017 which is 10.17 percent higher than the same period in 2016. Its contribution to total real GDP is 3.50% in fourth quarter, 2017. In 2017 the sector contributed 3.72 percent to GDP compared to 3.71 percent it contributed in 2016. This is the strongest the sector has grown since 2015.
This is the most significant growth that has been recorded by the sector which was greatly affected by the fall in global oil price. The sector suffered greatly when Nigeria was in recession because most companies and the government didn’t have money to pay for construction works that were being carried out for them. The sector also fell into a double-dip recession in the third quarter but closed 2017 on a positive growth of 1 percent.
Services grew in the fourth quarter (Q4) of 2017 to 0.10 after recording negative growth rates in six quarters and cycles of recession. This is the sector’s first positive growth since the first quarter of 2016 where it recorded 0.80 percent. However, the sector did not do better in 2017 where it recorded -0.91 compared to -0.82 percent recorded in 2016. It’s contribution to GDP was low.
This sector grew from -8.86 percent recorded in 2016 t0 2.19 percent in 2017. Although this is the sector’s third positive growth in 2017, it recorded a lower rate in the fourth quarter 2.17 percent compared to the 8.83 percent of the third quarter of 2017. However, its contribution of 21.96 percent in 2017 is higher than 22.26 recorded in 2016.
Apart from the factors mentioned above, trade grew by 2.07 percent in the fourth quarter of 2017 after six quarters of negative growth.