Nigeria Agriculture Sector GDP: Still resilient amid COVID-19?

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Yesterday, the National Bureau of Statistics (NBS) released Nigeria’s GDP report for Q2-2020. According to the report, the Agriculture sector which contributes c. 25.0% to real GDP was one of the 6 of 19 sectors to record y/y growth in Q2-2020. This was as the sector’s GDP growth slowed to 1.58% y/y in Q2-2020 (vs. 1.8% and 2.2% recorded in Q2-2019 and Q1-2020, respectively).

Notably, we suspect that restrictions in movement coupled with extension of planting season into Q2-2020 must have left an underwhelming imprint on the sector growth during the review period.

Looking ahead, we expect the Agriculture sector to stay resilient through Q3 and Q4-2020.

Nigeria Agriculture Sector GDP: Still resilient amid COVID-19?
Sources: NBS, United Capital Research

Specifically, we are of the view that the lifting of the ban on inter-state movement since July-2020 ease some of the supply chain bottlenecks which dragged the Q2-2020 performance. Also, given that Q4 is a seasonally strong quarter in the Agriculture sector amid harvest, we expect economic activities to further improve through H2-2020.

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The downside to the above outlook remains the possibility of an underwhelming harvest season, due to COVID-19 induced disruptions during the planting season and lack of rainfall.

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Also, we reiterate the need for Nigeria to invest in training and education of farmers, storage facilities, transportation network to facilitate movement of crops from farm to market, as well as R&D to boost Agricultural yield.

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Nigeria Agriculture Sector GDP: Still resilient amid COVID-19? - Brand SpurNigeria Agriculture Sector GDP: Still resilient amid COVID-19? - Brand Spur

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Nigeria Agriculture Sector GDP: Still resilient amid COVID-19? - Brand SpurNigeria Agriculture Sector GDP: Still resilient amid COVID-19? - Brand Spur

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