Nigerian economy still mired in recession for third quarter

21 Nov 16

Nigeria’s economy has remained firmly in recession in the third quarter of the year, the country’s National Bureau of Statistics has announced.

 

Africa’s biggest economy shrunk by another 2.2% between July and September, bigger than the 2.06% contraction seen in the second quarter and the 0.36% decline in the first three months of the year.

The country has been hit hard by the collapse in oil prices over the past few years and has been forced to cut production due to militants destroying key pipelines. This has plunged the once-booming economy into its first recession in decades.

The International Monetary Fund said the economy will contract by 1.7% overall in 2016 due to low oil revenues, shortages of foreign currency and power outages.

The government’s fiscal and monetary stimulus seem to have so far been unsuccessful in averting this downward trend and in reassuring foreign investors.

Plans for substantial infrastructure spending have not kicked the economy back into gear as hoped. Moreover, efforts to diversify and boost the non-oil sector, which expanded by just 0.03% in the third quarter, are yet to pay off.

Growth in the oil sector, the source of much of Nigeria’s growth and government revenue, was down 22.01% compared with 2015, and production fell compared with the second quarter of this year.

Aurélien Mali, a vice president at Moody’s and local market analyst for Nigeria’s government, said the country was still “undergoing a severe economic realignment” to adjust to lower oil prices and the knock-on effect on the country’s US dollar oil exports.

 

  • Emma Rumney

    Emma is a reporter at Otsubo7 International. She also writes for in the UK.

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