Chinedu Osiagwu

Nigeria’s economy grows 1.81% in Q3 despite oil sector contraction

Nigeria’s Gross Domestic Product (GDP) grew by 1.81 percent (year-on-year) in real terms in the third quarter
of 2018 as the country continues to recover following a 2016 recession, when growth declined for two consecutive quarters, contracting by 2.06 percent in the second quarter of that year. The growth came despite a contraction in real growth of the oil sector.

The 2018 Q3 growth is an increase of 0.64 percent when compared to the third quarter of 2017 which recorded a growth of 1.17 percent, a new report by Nigeria’s National Bureau of Statistics (NBS) showed. The economy grew by 1.50 percent in the second quarter of 2018, showing a rise of 0.31 percent, while quarter on quarter, real GDP growth was 9.05 percent.

The oil sector contracted 2.91 percent (year-on-year) in Q3 2018, indicating a decrease of 25.94 percentage points
relative to rate recorded in the corresponding quarter of 2017. However, growth increased by 1.04 percent when
compared to Q2 2018 which was –3.95 percent. The sector also grew quarter-on-quarter in Q3 2018 at a rate of
19.64 percent, contributing 9.38 percent to total real GDP.

Nigeria’s non-oil sector continues to gather pace, growing by 2.32 percent in real terms in Q3 2018, a 3.08 percentage points increase over the same quarter of 2017 and 0.28 percentage point higher than the second quarter of 2018.

According to the report by NBS, the growth of the non-oil sector in Q3 2018 was driven mainly by Information and communication, Agriculture, Manufacturing, Trade, Transportation and Storage and Professional, Scientific and Technical Services.

“In real terms, the Non-Oil sector contributed 90.62 percent to the nation’s GDP, higher from share recorded in the third quarter of 2017 recorded as 90.16% and lower than the second quarter of 2018 recorded as 91.45 percent,” the report said. Of the non-oil sector, the services sector made the largest contribution of 48.79 percent to real GDP, followed by Agriculture which contributed 29.25 percent and Industries 21.97 percent.

The International Monetary Fund (IMF) expects Nigeria to grow by 1.9 percent in 2018, having earlier released a 2.1 percent forecast for the country. The economy grew 0.8 percent in 2017 below sub-Saharan African average of 2.61 percent.