Q2 GDP GROWTH UP 0.55%: Nigeria-on-a-U-Shaped-Recovery

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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

Click here to download the full report…

 

 

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