Hard times ahead for Nigerians as GDP contracts again

Nigerians are expected to brace up for more economic hardship as the country’s Gross Domestic Product (GDP) in real terms declined by 6.10 per cent (year-on-year) in Q2 2020, ending the 3-year trend of low but positive real growth rates recorded since the 2016/17 recession.

This is according to the second quarter (Q2) GDP report, released by the National Bureau of Statistics (NBS) on Monday.

According to the numbers contained in the GDP report, the performance recorded in Q2 2020 represents a drop of 8.22 per cent points when compared to Q2 2019 (2.12%), and 7.97 per cent points decline when compared to Q1 2020 (1.87%).

Apparently, the significant drop reflects the negative impacts of the disruption caused by COVID-19 pandemic and crash in oil price on the Nigerian economy

Also, the latest GDP number shows that Nigeria’s oil sector recorded –6.63% (year-on-year) in Q2 2020, indicating a decrease of –13.80 per cent points relative to the rate recorded in the corresponding quarter of 2019.

Similarly, the non-oil sector declined by –6.05 per cent in real terms during the reference quarter (Q2 2020). This was the first decline in real non-oil GDP growth rate since Q3 2017.

The contraction recorded in the non-oil sector was –7.70 per cent points lower, compared to the rate recorded during the same quarter of 2019. More so, the contraction represents –7.60 per cent points compared to the first quarter of 2020.

According to the NBS, the decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.