NIGERIA may be fast heading for recession as its Gross Domestic Product (GDP) of quarter two (Q2) drops by 6.10 per cent, a report by the National Bureau Statistics (NBS) on Monday reveals.
According to the report, the decline was largely due to significantly lower levels of both domestic and international economic activities during the quarter, which resulted from a nationwide shutdown aimed at containing the COVID-19 pandemic.
The report indicates that Nigeria will see itself in another recession if the GDP rate declines in the next quarter.
Recession is a period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.
The report further said the domestic efforts ranging from initial restrictions of human and vehicular movements implemented in only a few states to a nationwide curfew, bans on domestic and international travels, closure of schools, and markets among other things have affected both local and international trade.
The NBS stated that when compared with the GDP rate in the second quarter of 2019, the rate increased to 2.12 per cent which now indicates a drop of 8.22 per cent when compared to the present figure of 6.10 percent.
Also, the latest GDP number shows that Nigeria’s oil sector recorded –6.63 per cent (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.
The report also said only 13 economic activities recorded positive real growth compared to 30 in the preceding quarter.