Nigeria’s economy is on the rise, achieving a 6.28 percent increase in the second quarter of 2012, attributable to the non-oil sector, as oil remains depressed. Inflation has lessened, lingering at 11.7 percent in August.
The National Bureau of Statistics (NBS) released its report yesterday, in which it details a turn-around in the pace of economic growth in Nigeria, which has over the past few years seen a significant slowing of growth – culminating in a three-year low of 6.17 percent in the first quarter of 2012.
This slowed growth in Africa’s second largest economy is largely attributable to the dip in oil-related trade over the past years. Over 80 percent of Nigeria’s government revenue comes from the oil sector, with oil accounting for 95 percent of the country’s foreign exchange earnings. As consumer countries in the developed world have experienced financial troubles over the past years, Nigeria has felt the knock-on impact with disruptions in the sector to both sales and production.
The NBS report shows that the building and construction sector has contributed substantially to the recorded growth rates, while the oil sector continues to display a depression in the market. While crude-oil production rose nominally as compared to the first quarter 2012 – from 2.35 million barrels per day (bpd) to 2.38 million bpd – this still reflects a significant decrease from Q2 2011, when the figure for the second quarter was 2.45 million bpd.
GDP growth has seen a mixed-bag of sector-specific results, as the largest contributing sector- agriculture – suffered a hit, as growth slowed to 3.97 percent for Q2 2012, as compared to 5.95 percent in Q2 2011. Surprisingly, the telecommunications sector also saw a slowing in GDP growth, down to 29.77 percent for Q2 2012, as opposed to 33.70 percent a year ago. Conversely, GDP growth was fuelled by the manufacturing sector which expanded to 7.45 percent in Q2 2012, from 7.34 percent in the corresponding period last year. Nonetheless, the report concluded that the quarterly nominal GDP had seen an overall increase as compared to the same period 2011, with the figure rising to 9.84 trillion naira ($62.4 billion) from 9.17 trillion naira ($58 billion) for Q2 2011.
Inflation has seen a recent dip to 11.7 percent in August, down significantly from 12.8 percent in only July – the report concluding that this good news can be attributed to the drop in food inflation over the same period; with food inflation falling to 9.9 percent in August from 12.1 percent in July.