By Tony Obiechina, Abuja
Nigeria’s Gross Domestic Product (GDP) growth rate contracted by 6.10 per cent (year-on-year) in real terms in the second quarter of 2020, the National Bureau of Statistics (NBS), said on Monday.
According to the NBS, this decline ends the three-year trend of low but positive real growth rates recorded since the 2016/17 recession.
The NBS Report explained that the decline was largely attributable to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown by the governments aimed at containing the COVID-19 pandemic.
The NBS said: “The domestic efforts ranged from initial restrictions of human and vehicular movement implemented in only a few states to a nationwide curfew, bans on domestic and international travel, closure of schools and markets etc., affecting both local and international trade.
Prof Uche Uwaleke
“The efforts, led by both the federal and state governments, evolved over the course of the quarter and persisted throughout”.
Reacting to the development, professor of capital market, Uche Uwaleke said the negative growth in real GDP in the 2nd quarter of 2020 was expected”.
In a statement made available to PromptNewsOnline in Abuja on Monday, the university don said “this appears to be in line with global expectations as we have seen similar trends recently in countries like UK and Japan”.
His words, “I am also not surprised about the huge size of the contraction put at 6.10%. As a matter of fact, because it is based on year-on-year, when one considers the 2.12% positive real GDP growth this same period last year, the decline in GDP comes to as high as 8.22%.
“It is easy to see why this happened. The negative impact of COVID’19 on health which resulted in lockdowns and supply chain disruptions, the collapse in crude oil price and reduction in output in compliance with OPEC + agreement, the illiquidity in the forex market and the lingering insecurity in the country which affected agriculture output are to blame.
“This explains why the Agriculture sector managed to eke out a growth rate of 1.58%, and manufacturing, trade and so many other sectors recorded negative growth.
“The lockdown and movement restrictions really affected the Accommodation and food services sector which declined by as much as 40%.
“I think this is going to be the worst this year. A negative real GDP growth is also most likely to be recorded in Q3 2020 but the size will be smaller as the economy gets restarted and crude oil price gradually picks up.
“To ensure, the impact of these economic headwinds are moderated, it is important to increase the size of the various interventions by the government and the CBN and ensure they are well targeted and implemented”.
