The nation’s financial system shrinks two quarters in a row amid contraction in its oil sector.
Nigeria has slipped right into a recession after its gross home product contracted for the second consecutive quarter, in keeping with official knowledge launched.
Africa’s greatest financial system is in recession for the primary time since 2016. The recession 4 years in the past was its first in a era, and the nation emerged from it the next yr.
Nevertheless, progress has been fragile and COVID-19 has hit the financial system exhausting, amid low oil costs.
The continent’s prime oil producer and exporter depends on crude gross sales for 90 p.c of overseas alternate earnings.
Nigeria usually accounts for a mean output of two million barrels per day. However the results of the pandemic and low oil costs have reduce manufacturing to roughly 1.4 million barrels.
“Q3 2020 Actual GDP contracted for second consecutive quarter by -3.62 p.c,” Yemi Kale, the statistician normal, mentioned on Twitter on Saturday.
“Cumulative GDP for the primary 9 months of 2020 subsequently stood at -2.48 p.c,” he added.
Oil sector hit exhausting
The oil sector contracted by 13.89 p.c within the third quarter towards progress of 6.49 p.c in the identical interval a yr earlier, in keeping with knowledge cited by Kale, whereas non-oil sectors shrank by 2.51 p.c within the three months to September.
Following Nigeria’s first confirmed COVID-19 case in late February, lockdowns had been imposed from late March till early Might in the primary cities – financial hub Lagos and the capital, Abuja.
Lockdowns had been additionally imposed in among the nation’s different states and a ban was positioned on interstate journey.
“The efficiency of the financial system in Q3 2020 mirrored residual results of the restrictions to motion and financial exercise applied throughout the nation in early Q2 in response to the COVID-19 pandemic,” the statistics workplace mentioned in a report revealed on Saturday.
“As these restrictions had been lifted, companies reopened and worldwide journey and buying and selling actions resumed, some financial actions have returned to optimistic progress,” it mentioned.
The federal government had beforehand mentioned it anticipated the financial system to contract by as a lot as 8.9 p.c this yr in a worst-case state of affairs with out stimulus.
The Worldwide Financial Fund has forecast a 5.4-percent drop in Nigeria’s GDP this yr.