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Manufacturing declines as 2.27% GDP growth surpasses IMF projection

Manufacturing declines as 2.27% GDP growth surpasses IMF projection

The National Bureau of Statistics released the Gross Domestic Product report for the 2019 fiscal year with the economy growing by 2.27 per cent in 2019.

The annual GDP growth rate of 2.27 per cent, according to the NBS, represents an increase of 360 basis points over the growth rate of 1.91 per cent recorded in 2018.

The International Monetary Fund had projected that the nation’s economy would grow by 2.1% in 2019.

But the 2.27 per cent growth rate recorded by the economy in 2019 surpassed the growth projection of 2.1 per cent by the IMF.

The NBS report said that during the fourth quarter of 2019, Nigeria’s GDP grew by 2.55 per cent year-on-year in real terms.

Compared to the fourth quarter of 2018 which recorded a growth rate of 2.38 per cent, it said this represented an increase of 0.17 percentage points and an increase of 0.27 percentage points when compared with the third quarter of 2019.

The fourth quarter 2019 growth rate, the NBS noted, also represented the highest quarterly growth performance since the 2016 recession.

The report reads in part, “Nigeria’s GDP grew by 2.55 per cent year-on-year in real terms in the fourth quarter of 2019.

“Compared to the fourth quarter of 2018 which recorded a growth rate of 2.38 per cent, this represents an increase of 0.17 percent points and an increase of 0.27 per cent points when compared with the third quarter of 2019.”

The report stated that in the fourth quarter of last year, the aggregate GDP stood at N39.57tn in nominal terms. This, it added, was higher than the fourth quarter of 2018 nominal GDP which stood at N35.23tn.

The NBS report stated that during the fourth quarter of 2019, average daily oil production of two million barrels per day was recorded.

This indicated an increase of 0.09 mbpd over the daily average production of 1.91 mbpd recorded in the same quarter of 2018.

However, it said the two million barrels per day was 0.04 mbpd lower than the production volume of 2.04 mbpd recorded in the third quarter of 2019.

Nevertheless, the report explained that oil production remained consistently at above 2.0mbpd all throughout 2019.

It put the real growth of the oil sector at 6.36 per cent in the fourth quarter of 2019, indicating an increase of 7.98 percentage points relative to the rate recorded in the corresponding quarter of last year.

The NBS report stated that growth decreased by 0.13 percentage points when compared to the 2019 third quarter figure of 6.49 per cent.

Quarter-on-Quarter, the report stated that the oil sector recorded a growth rate of –20.87 per cent in the fourth quarter of 2019.

On an annual basis, it said oil recorded 4.59 per cent growth in 2019, when compared to 0.97 per cent recorded in 2018.

The report said the oil sector contributed 7.32 per cent to total real GDP in Q4 2019.

For the mining and quarry sector, the NBS report explained that it grew nominally by 12.75 per cent year-on-year in the fourth quarter 2019.

The report stated, “Quarrying and other minerals exhibited the highest growth rate of all the sub-activities at 72.11 per cent followed by metal ore activity at 10.98 per cent.

“However, crude petroleum and natural gas was the main contributor to the sector with a weight of 94.59 per cent in Q4 2019 and 97.11 per cent for annual 2019.

“The mining and quarrying sector contributed 6.86 per cent to overall GDP in Q4 2019, higher than the contributions recorded in Q4 2018 (6.83 per cent) but lower than the preceding quarter (9.87 per cent).”

For the agricultural sector, the NBS report stated that the sector grew by 13.80 per cent year-on-year in nominal terms in the fourth quarter of 2019, showing a decline of 4.78 percentage points from the same quarter of 2018.

The report stated that crop production remained the major driver of the sector.

For the manufacturing sector, the NBS report stated that in the fourth quarter of 2019, the sector grew by 26.29 per cent year-on-year.

This is 7.27 percentage points lower than the 33.57 per cent recorded in the corresponding period of 2018 and 13.40 per cent points lower than the preceding quarter’s figure of 39.69 per cent.

The NBS put the contribution of manufacturing to nominal GDP in the fourth quarter at 11.37 per cent, higher than the 10.11 per cent recorded in the corresponding period of 2018.

For the construction sector, the NBS report said the sector grew by 43.72 per cent in nominal terms year on year in the fourth quarter 2019, a drop of 14.79 percentage points compared to the rate of 58.51 per cent recorded in the same quarter of 2018.

It said, “Construction contributed 6.44 per cent to nominal GDP in the fourth quarter of 2019, higher than the 5.03 per cent it contributed a year earlier and the 5.52 per cent recorded in the third quarter of 2019.

“For full year 2019, the sector accounted for 6.24 per cent of nominal GDP, higher than 4.72 per cent recorded in 2018.

“The sector accounted for 3.44 per cent of real GDP in the fourth quarter 2019, lower than its contribution of 3.48 per cent in the same quarter of the previous year.”

In terms of trade sector, the report put the nominal year-on-year growth rate of the sector at 2.03 per cent.

This indicates a decrease of 2.39 percentage points when compared to the fourth quarter 2018 growth rate of 4.41 per cent but 0.89 percentage points increase compared to the previous quarter’s growth rate of 1.13 percentage.

The real estate sector, according to NBS grew by 2.51 per cent in the fourth quarter of 2019.

For the banking and finance sector, the report indicated the sector’s contribution to nominal GDP at 3.12 per cent in the fourth quarter of 2019.

The President, Chartered Institute of Taxation of Nigeria, Mrs Olajumoke Simplice, attributed the decline in the manufacturing performance growth to the challenges of doing business in Nigeria.

The Chairman, Nigerian Insurers Association, Mr Tope Smart, said the IMF figure was just a projection while the real figure should come from NBS.

But on the decline in manufacturing performance, he said, “The environment has been very hostile to the manufacturing sector, particularly our environment for various reasons.”

The Presidency, however, praised the latest GDP growth report, saying it indicates a consistent growth of the country’s economy since 2017.

It cited the GDP growth of 2.55 per cent in Quarter Four of 2019 as proof of the consistency.

The Special Adviser to the President on Economic Matters, Dr Adeyemi Dipeolu, in his appraisal of the development, noted that it was as a result of the determination of the regime of the President, Major General Muhammadu Buhari (retd.), to “continue to drive the economy toward further growth and shared prosperity.”

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