The National Bureau of Statistics (NBS) has reported a contraction in Nigeria’s Gross Domestic Product (GDP) in the second quarter of 2020.1 The report stated a contraction of -6.10% in comparison to the 1.87% growth that was recorded in the first quarter of the year. This contraction is attributed to the COVID-19 pandemic, the consequential decline of output and the crashing of oil prices. Nigeria slowly recovered from recession in 2017 and has been on a gradual path towards growth. However, the current GDP contractions indicate that a second recession could be approaching. Steep declines in GDP growth calls for the diversification of the economy to stimulate growth in various areas including agriculture and agribusiness, manufacturing, and real estate. In addition, overreliance on global value chains particularly in the manufacturing sector should be curbed in order to improve resilience.
September 28, 2020
Nigeria Economic Update (Issue 36)
Related
Africa Economic Update (Issue 2)
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.