Nigeria’s economy exited recession in the fourth quarter of 2020, recording its first growth in three quarters as the coronavirus-linked lockdown was lifted across the country, the National Bureau of Statistics said in a report Thursday.
The report said Gross Domestic Product (GDP) grew 0.11 per cent in the three months between October and December from a year earlier.
This economy slipped into recession in the third quarter with a decline of 3.6 per cent. The economy had earlier contracted 6.1 per cent in the second quarter, leading to a second recession in five years.
For the full year 2020, the economy contracted 1.92 per cent, better than the International Monetary Fund projection.
The surprising rebound means the economy may recover faster than expected as the oil price and output increase this year. It could also point to the growing dominance of the non-crude sector, according to Joachim MacEbong, a senior analyst at SBM Intelligence in Lagos.
Oil production fell to 1.56 million barrels a day in the fourth quarter from 1.67 million barrels in the previous three months. While crude contributes less than 10% to the country’s GDP, it accounts for nearly all foreign-exchange earnings and half of the government revenue in continent’s biggest producer of the commodity.
The government’s forecast for growth of 3% this year is double that of the IMF.
A stronger recovery could ease pressure on the central bank to stoke activity, paving the way for a renewed focus on its price stability mandate. That means the monetary policy committee could start raising interest rates again to fight inflation that’s been above the target band of 6% to 9% for more than five years. The panel eased by 200 basis points in 2020.
Follow the Neptune Prime channel on WhatsApp: https://whatsapp.com/channel/0029Va74ZvU2v1IqKByXoX3d
Do you have breaking news, interview request, opinion, suggestion, or want your event covered? Email us at neptuneprime2233@gmail.com
