Nigeria’s 2019Q1 GDP Growth Up 2.01% On Weak Oil Sector, As MPC Meeting Begins

As members of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) begin their second regular two-day meeting for the year on Monday, one key data that may take a central place in their deliberation is the 2019Q1 GDP rate released earlier in the day by the National Bureau of Statistics (NBS), showing that the nation’s economy grew at 2.01%, a slower pace than the 2.38% reported for 2018Q4.
Nominal GDP, in the period, stood at N31.794tr, which was higher than the N28.438tr reported in the 2018Q1, representing a Year-on-Year growth rate of 11.8%; even as it was lower than the N35.23tr of 2018Q4 by 9.75%. The 2019Q1 nominal GDP growth rate, NBS added, was higher than the 2.54% recorded in 2018Q1.
Real GDP during the period, was N16.42tr.

Although, the slow growth was not expected, given the hints provided by supporting data like the CBN’s Purchasing Managers’ Index, inflation and the lull in the Nigerian capital market during the period under review.
The GDP rate came even weaker than the CBN’s 3.0% growth rate target for 2019, hampered by the oil sector.
Even then, the bureau noted that the 2019Q1 remains the strongest since 2015, a situation it linked to the general elections that were held within the period. The period witnessed significant liquidity in the system as shown by the CBN published currency in circulation during the period (READ). The period witnessed a huge cache of cash in the hands of Nigerians due to the spending spree by politicians seeking to swing votes in their favour.

Reacting via his personal twitter handle, Andrew Nevin, chief economists of PriceWaterhouseCoopers Nigeria, a firm of external auditors, noted that the 1Q GDP growth is only 2% when annualized, which “is just not good enough when a population grows at 2.7% per annum.”
He lamented that “every quarter, Nigeria gets poorer and poorer per capita…”
The services, industries, and agriculture, respectively, accounted for 54.6%, 23.5%, and 21.9% of overall output growth in the review period.
Oil sector GDP rose by 2.40% (compared to -1.62% in the previous quarter), with the NBS estimating Nigeria’s crude oil production during the three-month period at 1.96mb/d, marginally lower than the 1.98mb/d reported in 2018Q1, but 0.05mb/d higher than the 1.91mb/d recorded in 2018Q4. The oil sector contributed 9.14% of total GDP, compared to 7.06% and 9.55% in 2018Q4 and the corresponding quarter of 2018 respectively) during the review period.

The non-oil sector however expanded by 2.47% y/y in 2019Q1, down from 2.70% recorded in the final quarter of 2018, down when compared to the robust 14.02% growth achieved a year ago.
The non-oil sector contributed 90.86% to total GDP, (as against 92.94% and 90.45% in the three months to December 2018 and Q1-18 respectively).
A breakdown of three of the biggest components of the GDP shows that Services grew by 2.41% year-on-year, down from 2.90% in the preceding quarter and -0.47% y/y; while Agriculture grew by 3.17% YoY, 72 bps and 17 bps higher than growth rates recorded in Q4-18 and Q1-18 respectively.
Manufacturing (Industries) grew at 0.81% in Q1 2019; compared to 2.35% in Q4 2018; 1.92% in Q3 2018; 0.68% in Q2 2018 & 3.39% in Q1 2018.
Motor vehicles and Assembly GDP under manufacturing, however, jumped by 13.32% in Q1 2019; compared to -5.70% in Q4 2018 and 2.29% in the corresponding quarter of 2018.

https://investdata.com.ng/2019/05/nigerias-2019q1-gdp-growth-up-2-01-on-weak-oil-sector-as-mpc-meeting-begins/