Q4 GDP growth – fastest since Q4’15
Nigeria’s real GDP growth came in 0.27% higher at 2.55% in Q4’19. This is the fastest pace of growth since Q4’15. The sustained positive growth trajectory was largely supported by increased aggregate demand (Christmas effect), minimum wage implementation and the prolonged border closure. The average growth in 2019 is 0.36% higher than 1.91% in FY’18.
However, a further breakdown of the GDP data shows that growth is still largely underpinned by oil (6.36%). The OPEC joint technical committee has proposed additional oil production cuts of 600,000 barrels per day to cushion the effect of the coronavirus outbreak on oil prices. The enforcement of this could imply that Nigeria’s oil production will fall below the current level of 1.78mbpd. This would be inimical to GDP growth.
Economic recovery sustained but rate of growth still sub-optimal
Even though the Q4 GDP numbers indicate that the momentum along the economic recovery path has been sustained, the rate of growth is still sub-optimal to drive inclusive and transformational growth. The economy needs to grow by at least 6%-8% to breakout from the vicious cycle of poverty.
In this publication, the FDC Think-Tank analyzes the GDP numbers for Q4 and its implications.
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