Dear Esteemed Client:
The National Bureau of Statistics (NBS) today published the Gross Domestic Product (GDP) report for the third quarter of 2019 with data showing stronger growth momentum as the economy expanded 2.28%, compared to the revised estimate of 2.12% for Q2:2019 and 2.10% in Q1:2019. While Oil GDP growth accelerated 6.49% (on account of 5.2% Y-o-Y rise in oil output to 2.04mb/d), after recovering in Q2:2019 (+7.17%) from the negative level of -1.46% in Q1:2019, non-oil GDP (which contributed 90.23% to real GDP) grew 1.85%, compare to growth levels of 1.64% in Q2:2019 and 2.32% in the corresponding quarter of 2018. Growth data also showed a broad base expansion across Agriculture, Industries and Services sectors which grew 2.28%, 3.21% and 1.87% respectively. Of the six critical sectors (Agriculture, Trade, ICT, Oil, Manufacturing and Real Estate) accounting for 80.50% of real GDP, four, including Agric, ICT, Oil and Manufacturing grew for the quarter by 2.28%, 9.88%, 6.49% and 1.10% respectively. However, trade and Real Estate services slipped into recession in the quarter with the second consecutive decline of -1.45% and -2.31% respectively.
In our view, third quarter stronger growth numbers show the resilience of the Nigerian economy in the face of structural fault lines that have prolonged growth recovery to pre-2016 recession levels. In recent times, both the monetary and fiscal authorities have been putting a lot of efforts into stimulating economic activities within the domestic economy, one of which is the recent minimum Loan to Deposit ratio regulation to the banks and the segregation of short term treasury markets (OMO and T-Bills) to banks and foreign portfolio investors as well as retail and local institutional investors. We believe the path to a sustainable long term growth trajectory for Nigeria will require tough and painful decisions to be made, which may bear short term pains but with long lasting growth catalyzing impact. Read more