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More economic woes for Nigeria as GDP growth slows - BUSINESSDAY

MAY 21, 2019

Nigeria’s economic growth slowed in the first quarter of 2019 sparking further concerns about a looming poverty tsunami in Africa’s largest economy and most populous nation.

The fall in GDP growth rate came after the oil sector, the country’s biggest foreign-exchange earner, contracted.

Gross domestic product in Africa’s largest oil producer expanded by 2.01% in the three months through March from a year earlier, the Abuja-based National Bureau of Statistics said in a report published on its website Monday.

That compares with 2.4% expansion in the fourth quarter. The median estimate of five economists surveyed by Bloomberg was for growth of 2.6%.

Key Insights

  • The slowdown in growth could increase pressure on the Nigerian Central Bank to cut interest rates further when its announces it policy decision on Tuesday. The Monetary Policy Committee unexpectedly reduced the key rate in March to help boost expansion.
  • Economic growth slowed after the oil sector contracted 2.4 percent from a year earlier. The crude industry has declined every quarter since the three months through June 2018.
  • The economy is recovering from the 2014 crash in crude prices and the International Monetary Fund forecasts that growth will accelerate to 2.1% this year from 1.9% in 2018. That would still leave it as one of Africa’s least buoyant economies and will be below the rate of population growth, which is almost 3%.

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