As expected, National Bureau of Statistics (NBS) on Saturday confirmed that Nigeria entered recession in the third quarter of 2020, after two consecutive quarters of negative growth.
According to the bureau, economic performance during the quarter reflected residual effects of the restrictions to movement and economic activity implemented across the country in early Q2 in response to the COVID-19 pandemic.
“As these restrictions were lifted, businesses re-opened and international travel and trading activities resumed, some economic activities have returned to positive growth.”
The economy grew negatively by 3.62 percent year-on-year in real term during the period.
Recall that Nigeria entered its first recession in 29 years in 2016 but exited it in the second quarter of 2017.
Cumulatively, the economy has contracted by -2.48 percent in the first nine months of 2020.
NBS noted that although the third quarter performance was an improvement of 2.48 percentage points over the –6.10% growth of Q2 2020, it also indicates that two consecutive quarters of negative growth have been recorded in 2020.
Furthermore, growth in Q3 2020 was slower by 5.90 percentage points when compared to the third quarter of 2019 which recorded a real growth rate of 2.28 percent year on year.
A total of 18 economic activities recorded positive growth in Q3 2020, compared to 13 activities in Q2 2020.
During the quarter under review, aggregate GDP stood at N39,089,460.61 million in nominal terms.
This performance was 3.39 per cent higher when compared to the third quarter of 2019, which recorded an aggregate of N37,806,924.41 million.
This rate was, however, lower relative to growth recorded in the third quarter of 2019 by –9.91 percentage points but higher than the preceding quarter by 6.19 percentage points.
For clarity, the Nigerian economy has been broadly classified into the oil and non-oil sectors.
The average daily oil production recorded in the third quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpd lower than the average production recorded in the same quarter of 2019 and 0.14mbpd lower than production volume recorded in the second quarter of 2020.
Real growth for the oil sector was –13.89 percent (year-on-year) in Q3 2020, indicating a sharp contraction of –20.38% points relative to the rate recorded in the corresponding quarter of 2019.
Non-oil sector grew by –2.51% in real terms during the reference quarter, which is –4.36% points lower than the rate recorded in Q3 2019 but 3.54% points higher than in the second quarter of 2020. Non-oil sector was driven mainly by information and communication (telecommunications), with other drivers being Agriculture (crop production), construction, financial and insurance (financial institutions), and public administration.
In real terms, the non-oil sector contributed 91.27 percent to the GDP in the third quarter of 2020, higher than its share in the third quarter of 2019 (90.23 percent ) and the second quarter of 2020 (91.07 percent).