Q1 2020 Real GDP Grows by 1.87% on Weak Non-Oil Sector Performance

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In line with our expectation, Nigeria’s real Gross Domestic Product grew year-on-year (y-o-y) by 1.87% to N16.74 trillion in Q1 2020, slower than 2.55% growth registered in Q4 2019. The non-oil sector which accounted for the relatively weak GDP growth rate grew y-o-y by 1.55% (but contracted by 16.29% quarter-on-quarter) to N15.15 trillion. This was majorly due to the 2.82% and 4.75% contraction witnessed in Trade and Real Estate sectors to N2.69 trillion and N0.87 trillion respectively (of which trade and real estate joint share of GDP constituted 21.29%).

• On the other hand, agricultural, information & communications and manufacturing sectors, which jointly accounted for 45.69% of total GDP, all grew y-o-y by 2.20%, 7.65% and 0.43% respectively in Q1 2020, albeit, slower than 2.31%, 8.50% and 1.24% respectively in Q4 2019. The financial services sector spiked by 20.79% even as its share of real GDP rose to 3.81%, from 3.19% it printed in Q4 2019.

• The oil & gas sector grew y-o-y by 5.06%, albeit slower than 6.36% recorded in Q4 2019 –average price of Nigeria’s sweet crude, bonny light fell q-o-q by 20.11% to USD52.07 per barrel in Q1 2020, while it’s averaged crude oil production rose q-o-q by 0.55% to 1.8 million barrels per day (MB/d). With the sharp decline in crude oil prices, especially in the month of April 2020 – bonny Light average price was USD20.29/b –, coupled with the significant reduction in transactions seen in the non-oil sector amid lockdown orders, we expect negative growth in Nigeria’s Q2 2020 real GDP.

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Q1 2020 Real GDP Grows by 1.87% on Weak Non-Oil Sector Performance - Brand SpurQ1 2020 Real GDP Grows by 1.87% on Weak Non-Oil Sector Performance - Brand Spur

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Read Also:  Nigeria’s Economy Surpasses IMF’s Projection, Grows by 2.27% Records Highest GDP Growth Since 2016 Recession

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Q1 2020 Real GDP Grows by 1.87% on Weak Non-Oil Sector Performance - Brand SpurQ1 2020 Real GDP Grows by 1.87% on Weak Non-Oil Sector Performance - Brand Spur

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