According to the first quarter (Q1) GDP report released by Nigeria’s National Bureau of Statistics (NBS) on Monday, May 25, 2020, the West African country grew by 1.87 percent (year-on-year) in real terms in Q1 2020.
The numbers recorded by NBS revealed that the performance recorded in Q1 2020 represented a drop of 0.23 percent from the previous year. This inevitably reflects that disruptions caused by the global COVID-19 pandemic and crash in oil price and international trade had an impact on Nigeria’s Q1 GDP.
The statistics office reports that this is the slowest quarterly growth rate in one-and-a-half years and comes as Nigeria has still not recovered from a 2016 recession that sent more than 13 million people into unemployment.
Although the Nigerian economy contracted slightly in Q1, growth in Q2 is expected to dip largely due to lockdown across major economies of the world which disrupted both supply and demand chain.
According to IMF, the Nigerian economy is expected to contract by -3.4% in the year, as Covid-19 pandemic and oil price shock exacerbate the vulnerability of Nigeria fiscal and monetary landscape. Subsequently, the Oil sector, Travel and Tourism, Hospitality and Manufacturing are among sectors expected to contract largely in subsequent through 2020.
The slowdown reflects “the earliest effects of the disruption” from the global outbreak, said Nigeria’s National Bureau of Statistics, and comes as the government expects Africa’s largest economy to contract this year as much as 8.9% in a worst-case scenario.
Nigeria’s crude production was 2.07 million barrels a day, the statistics office said, the country’s highest level in more than four years.
But a global oil price crash due to reduced demand from the pandemic threatens to offset those gains, with annual growth in the oil sector contracting 1.3% from the previous quarter to 5.06%.
The non-oil sector was also hit: growing by just 1.55%, which was down 0.72% from the last three months of 2019, the statistics office said.
The World Bank expects the coming recession to be “much more pronounced” than in 2016 and potentially Nigeria’s worst financial crisis in four decades.