Nigeria finally turned the economic corner into positive growth of 0.55% after 5 consecutive quarters of negative growth and a deep recession.
The challenge is that the growth is anaemic and pale compared to the population growth of 2.7%. The good news is that growth was driven by solid performance in oil, energy, financial services and trade. Surprisingly, growth in the electricity, gas & air conditioning supply sector increased from -5.04% to 35.5% which was spectacular.
However, this output expansion is not enough to provide for the 14,000 new babies born every day in Nigeria.
- Nigeria fell into a recession for the first time in 25 years
- It lasted for 5 quarters from Q4 2015
- 15 major activities- 12 were expanding & 3 were contracting
- This report shows positive growth
- Below population growth rate of 3% and SSA growth of 2.1%
- Leading to falling income per capita
- Credit to private sector down marginally 0.02% in Q2
- Credit to public sector up 5.91% in Q2
- Average T-bill rate in Q2- 18.21% p.a (Effective 23% p.a)
- PMI in Q2 up from 55.9 to 58.5
Outlook & Implications
- PMI is up to 58.5
- Inflation marginally down to 16.05- core inflation 12.2%
- Interest rates flat but high – 14%
- Unemployment plus underemployment- 35.2
- Exchange rate flat at N365/$
- Income per capita falling- $1,929
- Misery index increasing – 50.2
- Aggregate consumption declining