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Non-oil sector in Nigeria spurs economy according to Q3, 2020 GDP report
Nigeria’s Q3 report from the National Bureau of Statistics NBS, shows finance, IT, agriculture and other non-oil sectors in a better performance than the oil sector.
With two consecutive growth slash in 2020, 3.62% in Q3, a 2.48% points higher than the 6.10% growth rate of Q2, Nigeria’s economy slips into a recession.
It is the second reccesion in four years and during President Muhammadu Buhari’s Administration.
Two classifications of economy in Nigeria – Oil and Non-oil sector in Q3 2020
Nigeria lowered its average oil production of 2019 by 0.37mbpd and that of Q2 by 0.14mbpd to produce an average of 1.67mbpd in the Q3, 2020.
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Oil Sector
With this level of oil production, the oil sector recorded -13.89% (year-on-year) real growth in Q3 2020. This is -20.38% points in relation to the rate recorded in the same quarter in 2019.
Quarter on quarter, the oil sector grew by 9.64% in Q3 2020 and contributed 8.73% to the GDP in Q3 2020. This is lower by 9.77% to the same period of 2019 and 8.93% than Q2 2020.
Other data for oil production and sector which includes real oil growth decreased by –7.26% points when compared with 6.63% oil sector growth recorded in Q2 2020.
Non-Oil Sector
The non-oil sector spurred the Nigerian economy in Q3, 2020 and grew by –2.51% in real terms in the said quarter.
With a -4.36% points lower than the rate recorded in Q3 2019 and 3.54% points higher than in the Q2, 2020, the non-oil sector contributed 91.27% to Nigeria’s GDP in the third quarter of 2020.
This is an improvement from the 90.23% in Q3 2019 and 91.07% in Q2 2020.
The main drivers of Nigeria’s Q3 GDP are in the non-oil sector and particularly the Information and Communication (Telecommunications). Agriculture (Crop Production), Construction, Financial and Insurance (Financial Institutions), and Public Administration were its backup.
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NBS Commentary
Nigeria’s economic stance during the COVID-19 lockdowns and post-lockdowns are reflected in the Q3 2020. After economic activities resumed, there has been some positive growth.
Nigeria’s aggregate GDP in Q3 attained N39,089,460.61 million in nominal terms. This performance was 3.39% higher when compared to the N37,806,924.41 million aggregate of the Q3, 2019.
This rate was, however, lower relative to growth recorded in the Q3, 2019 by –9.91% points but higher than Q2, 2020 by 6.19% points.
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