Economic coverage report for Nigeria from GTI research group anticipates the Q2 2018 GDP number to come in lower. The researchers in their report made available to business a.m Tuesday noted that the forecast was based on five reasons. These reasons are Lower crude oil exports, due to a shutdown of Trans-Forcados pipeline; Force majeure on Bonny light crude oil grade; Effect of rising prices on some commodities; Possible Political Instability due to forth-coming elections; Rising Insurgency in Northern Nigeria.
The GTI report which comes on the backdrop of the Q1 2018 GDP numbers released by the National Bureau of Statistics on Monday, May 21st, 2018, showed that the index grew by 1.95 percent year-on-year (y/y), compared to -0.91 in Q1 2017. But on a quarter-on-quarter basis (q/q) the index came in lower compared to 2.11 in Q4 2017. “The reason was the dip in Non-oil sector GDP whose Q1 2018 performance was lower considerably at 0.76 percent compared to 1.45 percent in the previous quarter,” GTI explained.
The GTI analysts further stated that the y/y 1.95 percent GDP growth achieved is a significant improvement and a step in the right direction, but noted that on a q/q basis, it disappointed as more was expected from the non-oil sector in Q1 2018 due to the level of effort being showed by the government especially as regards to agriculture.
Giving more insight into the country’s Q1 performance, “the reason for the drop in Non-oil sector GDP q/q was the dip in the agricultural sub-sector performance which declined from 4.23 percent in Q4 2017 to 3.00 percent in Q1 2018 majorly as a result by the dip in crop production which also contributes about 85.28 percent to the sub-sector.
Also, the contribution of the Agricultural sector to nominal GDP in Q1 2018 declined to 17.42 percent, lower than 21.93 percent the previous quarter and 18.00 percent in Q1 2017.
The Oil sector remained resilient, recording a growth of 14.77 percent against -15.60 percent in Q1 2017 and 11.20 percent in Q4 2017. It was buoyed by the rally in crude oil prices which is currently above $70 coupled with the increase in production volumes from 1.95 million barrels per day the previous quarter to 2.0 million barrels in Q1 2018. The oil sector contribution to the economy also increased from 7.35 percent in Q4 2017 to 9.61 percent in Q1 2018.”