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Nigeria may be headed for another recession as economy slows in Q2 2018

Published

6 years ago

August 27, 2018

The Nigerian economy has slowed for the second consecutive quarter this year, raising fears the nation may soon be heading for another economic recession.

According to the Gross Domestic Product (GDP) figures released by the National Bureau of Statistics (NBS) on Monday, the rate at which the nation’s economy grew in the second quarter of 2018 slowed to 1.50 percent from 1.95 percent recorded in previous quarter.

The GDP growth rate is the rate at which the value of all goods and services produced within a country’s border in a given period is rising.

Nigerian economy had officially slumped into recession in the second quarter of 2016 after recording negative GDP for two consecutive quarters, according to NBS.

Nigeria, which relies on crude oil for 70 percent for its revenue and over 90 percent for its export earnings, slumped into its worst economic woes since 1987 by recording five consecutive negative GDP growth rates from -0.67 percent in Q1 2016 to -0.91 percent in Q1 2017.

The nation’s annual growth rate turned positive in Q2 2017 with GDP growth rate of 0.72 percent and sustained the positive trajectory for five quarters till Q2 2018.

The economy would enter another recession when the GDP figures turn negative for two consecutive quarters.

The data indicated that the oil GDP contracted by -3.95 percent from 14.77 percent in Q1 2018, while non-oil GDP grew by 2.05 percent from 0.76 percent in Q1 2018.

Last week, the Statistician-General of NBS, Yemi Kale, had attributed the downturn to the clashes between farmers and herdsmen in some parts of the country.

The International Monetary Fund (IMF) had projected that the nation’s economy would grow from 0.8 percent in 2017 to 2.1 percent in 2018 and 2.3 percent in 2019 on the back of an improved outlook for oil prices.

According to the global monetary authority, the forecast “reflects improved prospects for Nigeria’s economy” and supported by the increase in commodity prices like crude oil.

With the GDP figures for the two quarters, the nation now has an average GDP of 1.73 percent for the first half of 2018.

Related Topics:GDP Gross domestic product National Bureau of Statistics NBS Nigeria Q2 2018

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VenturesNow

Nigeria has received $10.9 billion multi-sector investments from AfDB— Official

Published

4 days ago

July 23, 2024

Ifeoluwa Dada

Nigeria has received $10.9 billion from the African Development Bank (AfDB), comprising $4.9 billion in public and private sector initiatives.

AfDB Director-General of the West Africa Region, Lamin Barrow, said the bank’s Nigeria funding approvals total $10.9 billion since it started operations.

Barrow made the revelation at the Second Interactive Session and Workshop on Developing Bankable Business Proposals/Business Plans for Youths in Agriculture in Abuja on Monday.

It was part of the bank’s 60th anniversary celebrations with stakeholders. Nigeria is the AfDB’s largest shareholder, and the bank’s relationship with it has grown, Barrow said.

The AfDB invests in Nigeria’s energy, power, transport, water, and sanitation infrastructure.

“Over the last 60 years, the Bank has grown into a trusted partner and the continent’s premier development financial institution.

“Our cooperation with Nigeria has expanded over the years, especially considering that Nigeria is the largest shareholder.

“Since it started operations in the country, cumulative financing approvals have reached 10.9 billion dollars and our portfolio currently stands at 4.9 billion dollars supporting projects in the public and private sectors,” he said.

After taking office eight years ago, AfDB President Dr Akinwumi Adesina prioritized the High 5—Power, Feed, Industrialize, Integrate, and Improve Africa’s quality of life—Barrow added. He said these were accelerators for achieving the SDGs and Agenda 2063 ambitions. The projects and programs supported during this time have reportedly affected over 400 million individuals.

VenturesNow

Analysts expect Egypt’s economy to rise 4.0% in 2024/25

Published

4 days ago

July 23, 2024

Ifeoluwa Dada

A recent study that sampled seventeen economists by Reuters has predicted slower economic growth for Egypt in April after a $8 billion IMF accord in March.

The median projection for GDP growth in the fiscal year starting July 1 was 4%, down from 4.35% in April and 4.15% in January.

The poll predicted the GDP grew 2.9% in the fiscal year ending June 30. This is below their April and January predictions of 3% and 3.5%. Poll: 2025/26 growth should rise to 4.99%.

After the IMF agreement, Capital Economics’ James Swanston predicted slower growth due to tighter fiscal and monetary policies and a weaker pound.

“The overall net impact is that economic growth will be weaker this fiscal year, but there are reasons to be more optimistic on GDP growth from FY2025/26 onward,” Swanston said.

Egyptian tourism and Suez Canal revenue have slowed due to the Gaza crisis, which has cut Egypt’s foreign revenue by more than half.

Egypt’s planning ministry predicted 4.2% growth in 2024/25 on June 2. Analysts expect the Egyptian pound to fall to 49.50 per dollar by June 2025 and 52.50 by June 2026.

Before dropping it in March 2024, the central bank kept the pound at 30.85 per dollar. It’s roughly 48.40 per dollar.

The survey forecast 20.5% headline inflation in 2024/25 and 12.05% in 2025/26. In June, inflation dropped to 27.5% from a record high of 38.0% in September, exceeding the central bank’s objective of 5%-9%.

The analysts expect the central bank’s overnight lending rate to drop to 21.25% by June 2025 and 15.25% by June 2026.

Foreign money shortages have slowed the Egyptian economy. However, a $24 billion real estate transaction with the UAE in late February, a significant currency devaluation, and a $8 billion IMF accord in early March have mitigated that.