Nigeria enters recession as economy shrinks again

Buhari presides over Federal Executive Council Meeting at the State House Abuja

Buhari presides over Federal Executive Council Meeting at the State House Abuja

The National Bureau of Statistics, NBS, in its GDP report for Q3' 2020 said that the nation recorded GDP growth of -3.62% in Q3' 2020, though an improvement from the -6.10% growth recorded in Q2'2020.

Nigeria's economy went into a recession in 2016 following a lull in economic activities as a result of the delay in the appointment of ministers and other key appointees upon take over of the reins of government in 2015 President Buhari.

Non-oil GDP shrank 2.51% over the same period, compared to 6.05 percent in the second quarter.

It is the nation's second recession since 2016, and the worst economic decline in nearly four decades.

NBS said the economy slipped into recession at the end of the third quarter (Q3) which ended in September.

Nigeria, Africa's biggest economy, has entered its second recession in five years as official figures published on Saturday show that the economy shrank again in the third quarter of this year.

For the first time in more than three years, the Nigerian economy shrank in the second quarter of 2020 as the GDP fell by 6.10 per cent, compared with a growth of 1.87 per cent in Q1.

Construction under Industry real GDP grew by -2.84 per cent compared to -31.77 per cent in Q2 2020 and 2.37 per cent in Q3 2019.

The NBS had said in August that the economic decline in Q2 was largely attributable to significantly lower levels of both domestic and global economic activity resulting from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

"Real growth for the oil sector was -13.89% (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".

In June, the World Bank warned that the collapse in oil prices and the COVID-19 pandemic could dip the Nigerian economy into the worst situation since the 1980s. The continent's top oil exporter relies on crude sales for 90% of foreign exchange earnings.

"Net oil and gas revenue and influx to the federation account in the first quarter of 2020 amounted to N940.91billion".

She added that the economic contraction will multiply the misery of the poor.

Economic recession is defined as two consecutive quarters of negative Gross Domestic Product (GDP) growth.

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