Global economic growth remained fairly stable in 2016Q3 with baseline projections for global growth at 3.1 percent and 2.4 percent by International Monetary Fund (IMF) and the World Bank respectively. Growth in developed countries was moderate but unevenly distributed: while the U.S and the UK showed improvements, growth in other economies remained tepid. Among emerging countries, India witnessed higher growth while growth in China remained constant but the Chinese Yuan continued to appreciate. Given that India is Nigerias major crude oil importer, improving economic conditions in India may translate into rising demand for Nigerias crude oil. However, the continuous appreciation of the Yuan poses significant inflationary threat in Nigeria given the high level of imports from China. Subdued global demand, weak trade, uncertainties in commodity prices and consequences of the Brexit were the key constraining factors to growth over the period. In addition, growth in Sub-Saharan African countries remained generally slow on the account of low commodity price, political turmoil, and inconsistent government policies.

Recently released data by the National Bureau of Statistics (NBS) shows that there was significant increase in Nigerias total merchandise trade for 2016Q3. Basically, the total merchandise trade increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil exports increased by 31 percent to N1, 943 billion, while non-oil exports increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria recorded yet another trade deficit of N104 billion, indicating continuous higher imports relative to exports. Overall, though there is improvement in the performance of non-oil sector, however, this is insufficient to effectively complement the loss in oil trade sustained since the beginning of oil price crash. This suggests that diversification into non-oil sector may not be able to rescue the economy in the short term. However, while the diversification efforts should be sustained, eliminating hurdles in oil production may be instrumental to higher exports, especially as oil price increase is gaining momentum.

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.