Following the release today of the latest GDP Growth numbers by the National Bureau of Statistics (NBS),the Minister of Budget and National Planning, Senator Udoma Udo Udoma, says government is encouraged by the continuing growth recorded in the non-oil sector, which grew by 2.05% in the second quarter of 2018. This he noted was evidence that the implementation of the targeted policies and programmes of the Economic Recovery and Growth Plan (ERGP) is yielding positive results.
The Minister, who was reacting to the NBS Report, said that he was happy to see that the Nigerian economy has continued to register positive growth in the first and second quarters of the year in spite of the security and other challenges faced by the country.
He emphasized that the focus of the ERGP is on diversifying the economy away from dependence on the oil and gas sector and was encouraged that efforts are yielding fruits by the continuing growth in the non-oil sector..
The Minister noted that this 2.05% growth in the non-oil sector represents the strongest growth in the non-oil GDP since the fourth quarter of 2015.
The NBS Report indicated that the non-oil growth was driven by Transportation (road, rail water and air) which grew by 21.76%, supported by Construction 7.66% and Electricity 7.59%. These three are priority areas of the ERGP. Other non-oil sectors that drove growth in the second quarter include Telecommunications which grew by 11.51%, Water supply and Sewage 11.98% and Broadcasting by 21.92%.
The Minister regretted that there was a slight drop in real GDP growth rate for the second quarter principally as a result of the contraction in the oil sector. The Oil and Gas sector contracted by -3.95% in the second quarter of 2018 compared to a growth rate of 14.77% recorded in the first quarter of 2018 and 3.53% in the corresponding period in 2017. However, the Minister noted that the contraction in the Crude oil and Gas sectors is attributable to some production issues which are being addressed by NNPC. For instance, average crude oil production was only 1.84 million barrels a day in Q2 2018 as opposed to an average production of 2 million barrels a day in Q1 2018. He is optimistic that once these issues are addressed we should be able to, once more, achieve positive growth in the oil and gas sector. As he has repeatedly emphasised, the Nigerian economy needs growth from both the oil, as well as the non-oil sectors, to achieve its ERGP growth targets.
Another area of concern for Government was the slightly weaker growth in the Agriculture sector which slowed to 1.19% in the second quarter in 2018 compared to 3.0% in the first quarter of 2018.This is partly attributable to security challenges mainly in the North East and North Central zones.
These security challenge affected activities of farmers with the resultant impact on commodity output; but he indicated that the various measures being taken by government to tackle the situation is already reducing incidents of violent conflicts and other disruptions to farming activity. He therefore expects to see a rebound in growth in the Agriculture sector in subsequent quarters.
He was happy to see that Industry has continued to maintain a positive growth rate as a result of the performance of Manufacturing and Solid minerals which retained positive growth of 0.68% and 5.24% respectively in the second quarter of 2018; while the Services sector recorded its best GDP performance in nine quarters, growing by 2.12% in the second quarter of 2018 compared to a contraction of -0.47% in the first quarter of the year and of -0.85% in second quarter of 2017.
The Minister was encouraged by these GDP growth results which he said is also consistent with improvements in other indicators including inflation and capital inflows, amongst others.
The NBS Report shows that headline inflation has consistently declined every month since January 2017 through July 2018 from 18.72% to 11.14%. The consecutive disinflation year on year, which is the eighteenth in a row, has resulted in the lowest rate of inflation since June 2016, he stated.
He was also happy to note that the Nigerian economy has continued to attract significant capital inflows.“The total value of capital importation into Nigeria stood at $ 5.5 billion in the second quarter of 2018, representing a 207.62% increase compared to the second quarter of 2017”.
While capital importation declined slightly in the second quarter of 2018, the total for the first half of 2018 at $11.8billionrepresents the highest half year capital importation since 2014, indicating increasing confidence in the Nigerian economy, he pointed out.
He was optimistic that as Government intensifies its activities in the implementation of the Economic Recovery and Growth Plan the economy will sustain this growth momentum. The Minister conceded that, whilst we still have some way to go to achieve the target growth rates of the ERGP, these continuing positive results are signs that we are moving in the right direction. He re-iterated the commitment of the Buhari Administration to turn this country around to become a productive country where we ‘grow what we eat, consume what we make and use what we produce’, thereby providing jobs for our teeming population.