February 28, 2017/Cordros Research

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The National Bureau of Statistics (NBS) just released Nigeria’s Q4-2016 GDP growth estimate. Real GDP contracted by 1.3%, 20bps lower than Bloomberg’s compiled median estimate of -1.5%. This marks the first year round negative growth since 1987 (prior to rebasing). For the full year 2016, GDP contracted by 1.51% in real terms — biggest since 1983 (-7.6%).

A quick look at the breakdown of the GDP figure shows that the oil sector recorded a negative growth of 12.38% (from –22.01% in Q3-2016 and -8.28% in Q4-2015). Over the three months period, output from the oil sector was affected by relatively lower domestic crude oil production as the effect of militants’ attacks on crude oil & gas facilities in prior quarters lingered. The NBS estimated crude oil production during the three months period to be 1.90mbpd, which improved from the 1.63mbpd reported in Q3-16 but was much lower than the 2.16mbpd achieved in Q4-2015. Compared to Q3-16, the oil sector grew by 8.07%, unchanged from the q/q growth recorded in the previous quarter.

After exiting recession with a marginal 0.03% growth in Q3-16, the non-oil sector slipped back to the negative growth region, declining by 0.33% y/y in the final quarter of the year. Compared to Q3-16, the non-oil sector grew by 5.27%, down 381bps from the 9.08% q/q growth recorded in the previous quarter.

A quick look at the breakdown of the biggest components of the GDP shows that agriculture grew by 4.03% y/y (vs. 4.54% y/y in Q3-2016), manufacturing contracted by 4.38% y/y (vs. -2.54% y/y in Q3-2016), while trade declined by 1.44% y/y (vs. -1.38% y/y in Q3-16).