By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Nigeria’s Gross Domestic Product (GDP) grew by 6.99 percent (6.99%) in the Fourth Quarter (Q4) of year 2012.

This is contained in the Revised 2011 Estimates for First to Fourth Quarter of year 2012’s GDP for Nigeria from the Presidency as prepared by the National Bureau of Statistics (NBS).

From the Report overall GDP Estimates (Revised 2011 and estimates of Q1 – Q4 of 2012), on an aggregate basis, the economy when measured by the Real GDP, grew by 6.99 percent in fourth quarter of 2012 as compared to 7.76 percent in the corresponding quarter of 2011.

The Report says this was also slightly lower than the initial forecast for the fourth quarter of 2012 at 7.09 percent.

According to the GDP Estimate, relative to the third quarter of 2012, the economy experienced an uptick as growth increased by 0.44% points from the 6.48% recorded in the third quarter of 2012.

The nominal GDP for the fourth quarter of 2012 was estimated at 10, 593, 714, 64 million Naira compared to 9,554,854.69 million Naira during the corresponding quarter of 2011.

The economy, which can be broken into two broad output groups, that is, Oil and Non-oil sectors, had both sectors witnessing decreased output in the fourth quarter of 2012. The non-oil sector growth was driven by growth in activities recorded in the building & construction, cement, hotel and restaurant, and electricity sector.

This is coming on the heels of Reports from the Second West Africa Global Banking & Investment Forum in London United Kingdom (UK) held in November 2012 where Analysts affirmed that Real GDP growth in the Economic Community of the West Africa States (ECOWAS) area is expected to rise to six percent (6.0%) by year 2013.

Analysts at the forum said in certain categories some West African economies are comparable to the world’s best performers; starting a business in Senegal takes only 5 days, same as in Canada and faster than in France. Construction permits in Burkina Faso take only 98 days, 3 month faster than the European Union average.

The Analysts say it’s conceivable that Nigeria could follow Brazil’s path and if it were to follow that trajectory it has seven (7) years to improve its economic performance.

They said compared with other new Investment Grade Sovereigns, Nigeria would have to run just to stand still. “Urgent structural reforms are required in the power sector. The country’s official reserves are improving but these are affected by oil price volatility and a buffer really needs to be in place” Analysts said.

According to them, 35% of Nigeria’s GDP is based on the oil/gas sector. “Nevertheless, Nigeria is a positive story and there is more optimism surrounding the banking sector since improved corporate governance was introduced. More improvement within this sector could occur if further reforms were implemented” the Analysts said.

Prior to this time, Moody’s Investors Service, Global Credit Research Firm assigned local and foreign currency issuer rating of Ba3 to the Federal Government of Nigeria (FGN) and affirming the outlook of the rating as stable.

Moody’s named four (4) key factors on rating Nigeria. The first one underlying Moody’s assignment of a Ba3 rating to Nigeria the expectation of continued strong economic growth given the country’s proven resilience to economic shock; as demonstrated during the global economic crisis and Nigeria’s domestic banking crisis in 2008-09.

Also, Moody’s expects the Nigerian economy to grow by 7.1 percent (7.1%) this year; slightly down from 7.4% in year 2011 as a result of the higher interest rate environment.

The number two (2) factor reflected in the rating is Nigeria’s weak institutional strength; even relative to its Ba3-rated peers. “Nigeria’s very low World Bank Governance scores placed the country in the bottom quintile of Moody’s rated countries in terms of governance” the Report said.

The third key factor of the Ba3 rating by Moody’s to Nigeria is the establishment of a Sovereign Wealth Fund. Moody’s said the Nigerian Sovereign Investment Authority (NSIA) to save and invest the country’s future Oil Windfall, is a positive for Nigeria’s financial strength.

The number four (4) factor informing Moody’s Ba3 rating of Nigeria is the country’s moderate risk event, which is driven by the heightened security in the North of Nigeria.

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