Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 47)

Nigeria has slipped into a recession after recording two consecutive quarters of negative growth rate. Gross Domestic Product (GDP) grew by –3.62 percent in the third quarter of 2020 from -6.1 percent in the second quarter of 2020. The negative growth can be attributed to the decline in growth recorded in both the oil and non-oil sectors.1 Growth rate of the non-oil sector which contributes 91.3 percent to GDP stood at -2.51 percent while the growth rate of the oil sector stood at -13.89 percent. Further disaggregation of the data shows that an average of 1.67 million barrels of oil was produced daily in the third quarter of 2020 which was lower than the production in the same quarter of 2019 and in the second quarter of the 2020 by 0.37 million barrels and 0.14 million barrels respectively. Economic recovery will be largely dependent on the complete implementation of the 2020 budget as well as the Economic Sustainability Plan (ESP). However, availability of finance could pose a problem given that the key financing sources are loans from official creditors which are not as easy to obtain in these climes. Nevertheless, the increased availability of finance to the private sector such as the Youth Investment Fund and SME finance is likely to improve the economic prospects in the near term.

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