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Nigeria has officially entered into another recession three years after exiting the 2016 economic downturn. The country's Gross Domestic Product contracted twice in two consecutive quarters - Q2 and Q3 - to push the economy into its worse recession.
According to a report obtained from Nigerian Bureau of Statistics (NBS), the Real GDP contracted for second consecutive quarter by -3.62% in Q3 (July to September) this year, having contracted by -6.10% in Q2 (April to June) 2020.
When Q3 2020 report was compared to the corresponding period of 2019 third quarter, the Real GDP fell significantly, as it had recorded a growth of 2.28% during the period. In a broader view, Nigeria's economy (GDP) in "first 9 months of 2020 therefore stood at -2.48%"
AllNews gathered from the NBS report that Oil and Non-Oil GDP declined, contracting consecutively within the second and third quarters of 2020. However, the Agric sector was able to give the economy a lift, reducing the fall of the economy in Q3 2020.
It was learnt that Oil GDP contracted by -13.89% in third quarter this year, in similar fashion to Q2 this year, but lower when compared to the -6.63% of Q2 2020; the sector had enjoined a growth of 6.49% in the corresponding period of Q3 2019.
Also, Non-Oil GDP contracted by -2.51% in Q3 this year, falling short of the -6.05% contraction of Q2 2020; the fall is higher than the 1.85% growth recorded during the same period of Q3 2019.
While Oil and Non-oil GDP contracted, the Agric sector recorded a growth of 1.39% in Q3 2020, although lower than the 1.58% in Q2 2020, and the 2.28% growth NBS reported in Q3 2019. Meanwhile, Fish segment under Agric declined.
According to NBS, "Crop Production under Agric real GDP grew by 1.38% compared to 1.44% in Q2 2020 & 2.41% in Q3 2019." adding that, "Fishing under Agric real GDP contracted by -2.07% compared to 5.68% in Q2 2020 & 1.68% in Q3 2019.
"Livestock under Agric real GDP grew by 2.29% compared to 2.26% in Q2 2020 & 0.02% in Q3 2019." NBS disclosed. The statistics agency also disclosed that, "Forestry under Agric real GDP grew by 2.55 % compared to 1.08% in Q2 2020 & 3.78% in Q3 2019."
The impact of the COVID-19 pandemic and the nationwide lockdown lingered even after the government reopened the economy. Recall that toward the last month of Q1 and into Q2, a lockdown was announced, affecting production and activities of trade.
Prior to the emergence of the COVID-19, the price war between Russia and Saudi Arabia had affected oil price, as there was more crude oil than the market demanded, leading to a fall in crude oil price. And with the pandemic, demand for oil fell drastically due to restriction of movement.
Oil price fell to one of its lowest, before picking up in Q2, but still low in Q3. Nigeria's revenue from oil significantly declined due to industrial lockdown within the country, caused by the pandemic, and global lockdown as well.
Also, manufacturing industry couldn't continue manufacturing or trade their already produced goods, leading to a significant drop in the revenue coming from non-oil sector, hence, the reduced revenue contributed to the Nigerian economy, which resulted into the recession. Nigeria's economy is expected to recover or exit the recession in 2021.
Note that this is the second time Nigeria's economy will enter into recession under President Muhammadu Buhari - and the third under Buhari as a military and presidential leader in Nigeria.
To See The Full NBS Q3 Economic Report, Click This Link.