For the first time since the country recovered from its first recession in 25 years, Nigeria’s economic growth slowed in the first quarter of 2018.
On Monday, the National Bureau of Statistics (NBS) said the economy shrank 0.91 percent in the first quarter of 2017. However, the economy grew by 1.95 percent in the first quarter lifted by the oil sector, though there was a slight dip from 2.11 percent year-on-year in the final quarter of 2017, Reuters reported.
Nigeria’s oil-dependent economy was mired in its first recession in over two decades. The recession was triggered mainly by troubles in its oil sector. The fall in global oil prices coincided with a brief resumption in militancy in Nigeria’s oil-rich down south which caused oil production levels to fall to 20-year lows. As a result, Nigeria’s oil revenues fell sharply and, to stem the bleeding, the central bank set up currency controls to conserve its foreign reserves but that spawned a dollar shortage which hit local businesses hard.
In 2017, West Africa’s biggest economy emerged from its first recession in 25 years, expanding 0.55 percent year-on-year according to the National Bureau of Statistics (NBS). The growth was driven by an expansion in oil output as well as steady agricultural growth. Growth rates had been bouncing back since the third quarter of 2016. A data from the NBS in the third quarter of 2017 revealed that the country’s recovery, albeit slow, was on track. It recorded 1.4% growth in the third quarter.
Meanwhile, according to World Bank’s bi-annual economic update released on Tuesday, 2 May, “the unemployment and underemployment rates increased in 2017; poverty is estimated to have increased, and spatial fragmentation and limited connections also hurt welfare and prospects for poverty reduction.” Economists expressed concern at the sluggish recovery, noting that it failed to drive a strong rebound in overall economic growth.
The Nigerian Senate on Wednesday passed a 9.12 trillion naira ($29.8 billion) budget for 2018. The budget will be used to spur growth in the West African country’s economy and will cover the duration of nine months before the country’s imminent presidential election scheduled for next year.
President Muhammadu Buhari’s administration has spent much of the last three years since he came to office championing the idea that for Africa’s largest economy to have any hope of making meaningful progress, it needs to diversify from its reliance on oil. Much of the efforts in ensuring that the dream of diversification comes to pass have not yielded results.
In the first quarter of this year, the oil sector increased 14.77 percent in the period, higher than the non-oil sector, which rose 0.76 percent from January to March, while oil production was at 2 million barrels per day, up from 1.95 million in the previous quarter, the NBS said.