Recently released GDP report for the first quarter of 2018 shows a stronger growth in GDP, relative to the corresponding quarter of 2017. Driven particularly by growth in the Oil sector, Real GDP grew by 1.95 percent (Year-on-Year) in 2018Q11. In terms of sectoral growth, oil sector rose remarkably to 14.77 percent, a 30.37 percent increase from 2017Q1. Non-oil sector grew by 0.76 percent (Year on Year), slightly up from 0.8 percent- this marginal increase was driven mainly by Agriculture (Crop production), in addition to Manufacturing, Financial institutions and insurance, Transportation and Storage, and Information and Communication
Macroeconomic Report & Economic Updates
The considerable increase in inflation continued to be driven by exchange-rate-pass-through from imported items as well as the lingering scarcity in the availability of Premium Motor Spirit (PMS). One of the key ways to reduce inflationary pressures in the near term is to improve the supply of PMS to filling stations. In the medium to long term, the Nigerian National Petroleum Corporation (NNPC) may need to revitalize local refining and bridge the gap between the supply and demand for PMS by households and businesses.
Business activities in Africa slightly improved in February 2017 albeit at a slow rate. Sales Managers Index (SMI) for Africa an assessment of business condition in Pan-African Economy increased by 0.4 index points from 52.2 points in January 2017 to 52.6 points in February 2017. Sub-Saharan African countries experienced better business activities than North Africa in the review period. The two largest economies in the region, Nigeria (48.5 index points) and South Africa (49.2 Index points) registered contraction in the review period as Nigeria remained in recession while high unemployment remained a problem in South Africa. The growth in SMI recorded in the review period is driven by improvement in business confidence and sales price which outweighed the fall in other components market growth, sales output and staffing level.
Nigerias Bonny light price declined by 7.1 percent from $40.19 per barrel on March 24, 2016 to $37.32 per barrel on April 1, 20162. OPEC weekly basket price also decreased by 3 percent from $35.81 per barrel to $34.74 per barrel within the same period3. The remerged downward trend in crude oil price is traceable to concerns over the likely failure of the oil production freeze deal between Saudi Arabia and Iran4. The outcome of the oil production freeze meeting which is scheduled to hold on April 17, 2016, will give further direction for oil supply regulation.
This report examines the pattern of economic growth and employment generation in Nigeria based on quarterly data. It also analyzes the quality of job creation, dynamics of output and employment and establishes the link or absence thereof between economic growth and labor demand.