Nigeria’s economy roared back to life in the second quarter of 2017 and may be destined to shock the global arena by year-end, as the nation’s macro fundamentals improved beyond market expectations, says Mr. Lukman Otunuga, research analyst at ForeTime.
A report by the National Bureau of Statistics (NBS), indicates that in the second quarter of 2017, the nation’s Gross Domestic Product (GDP) grew by 0.55% (year-on-year) in real terms, indicating the emergence of the economy from recession after five consecutive quarters of contraction since Q1 2016.
“This growth is 2.04% higher than the rate recorded in the corresponding quarter of 2016 ( –1.49%) and higher by 1.46% points from rate recorded in the preceding quarter, (revised to –0.91% from –0.52%). Quarter on quarter, real GDP growth was 3.23%,” the NBS said.
“During the quarter, aggregate GDP stood at N26,986,005.20million in nominal terms, compared to N23,547,466.91 million in Q2 2016, resulting in a Nominal GDP growth of 14.60%,” the report added.
An economy is said to be in recession after contracting for two consecutive quarters.
The Nigerian economy slipped into recession in early 2016.
Commenting on the report, Otunuga said that the largest economy in Africa displayed its resilience yet again by growing 0.55% in Q2, despite suffering a painful contraction for five consecutive quarters.
"With Nigeria’s economic rebound powered by sustainable resources such as manufacturing, agriculture and trade, the overall outlook continues to appear quite encouraging," he said.
The Analyst, however, advised the government to remain steadfast with the push for economic diversification, adding that dependence on oil could backfire on the economy.
"While oil was also a player in the nation’s recovery, it should be kept in mind this source of growth may be temporary, as Nigeria still remains in an ongoing quest to diversify its interests away from oil reliance.
"Sentiment towards the Nigeria economy is likely to receive a boost following the release of such positive GDP data, with investors across the globe and at home becoming increasingly optimistic over the nation’s outlook", he said.