The Nigerian economy contracted in the fourth quarter of 2016 for the fourth consecutive quarters. However, the rate of contraction has started reducing following the Federal Government efforts at bolstering economic activities.

The economy contracted 1.30 percent in the fourth quarter of 2016 to N18,292.95 billion, from N18,533.75 billion recorded in the fourth quarter (Q4) of 2015, according to the National Bureau of Statistics (NBS) report released on Tuesday.

This was -2.24 percent less than the decline recorded in the previous quarter but lower than the 2.11 percent growth rate recorded in the final quarter of 2015.

On a quarterly basis, real GDP rose 4.09 percent following rise in the general price level.

However, on a yearly basis, the economy contracted 1.51 percent, indicating real GDP of N67,984.20 billion for 2016. This reduction in the economic activities reflects weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a weaker currency.

Also, it showed series of problems in the energy sector – lower electricity generation and struggling banking sector.

Oil Sector

According to the NBS, Oil output was estimated at 1.9 million barrels per day (mbpd) in the fourth quarter of 2016. Which was about 0.27 million barrels per day higher than output in the previous quarter, but lower than production in the same quarter of 2015 by 0.25 million barrels per day, when output was recorded at 2.16 mbpd.

“For the full year 2016, oil production was estimated to be 1.833 mbpd, compared to 2.13 mbpd in 2015. This reduction has largely been attributed to vandalism in the Niger Delta region. As a result, the sector contracted by -13.65 percent; a more significant decline than that in 2015 of -5.45 percent. This reduced the oil sectors share of real GDP to 8.42 percent in 2016, compared to 9.61% in 2015.

“In the fourth quarter of 2016 this sector declined by -12.38 percent in real term (year-on-year). This was an improvement relative to the previous quarter, when the sector declined by -22.01 percent, but nevertheless was a more severe decline than in the fourth quarter of 2015, when a contraction of -8.23 percent was recorded.

“Quarter-on-Quarter, real oil GDP grew 8.07 percent. As a share of the economy, the Oil sector represented 7.15% of total real GDP, compared to 8.06 percent in Q4 2015 and 8.19 percent in Q3 2016.”

Non-oil Sector

“The non-oil sector declined by -0.33 percent in real terms in the fourth quarter of 2016. This was 0.36 percent points lower than growth of 0.03 percent recorded in Q3 2016, and 3.46 percent points lower than the 3.14 percent growth recorded in Q4 2015. Given that the growth rate was stronger than in the oil sector, the non-oil sector increased its share of GDP to 92.85 percent, from 91.94 percent in the fourth quarter of 2015.

“The sector to weigh on non-oil growth the most was Real Estate, which declined by -9.27 percent and contributed to –0.77 percent points to year on year growth in total real GDP. However, Manufacturing, Construction and Trade also made significant downwards contributions, ameliorated slightly by continuing strong growth in Agriculture (especially Crop Production).

“For full year 2016, the non-oil sector declined by -0.22 percent in real terms, compared to a growth rate of 3.75 percent in 2015, a difference of 3.97 percent points.”

The figures showed the pace of contraction has started cooling from the third quarter of 2016 and on track for economic recovery by the second quarter of 2017.

Similarly, for the past 4 months, the pace of increase of inflation rate has been reducing, indicating consumer prices are beginning to adjust to a series of policy been implemented by the Central Bank of Nigeria. This further validated CBN projection that economic recovery plan would start manifesting by the second quarter of 2017 following successful OPEC consensus in November 2016.

The Naira has gained N95 against the US dollar since the CBN introduced new forex policy last week and continued to do so as importers can now access dollar at a moderate exchange rate. Experts have said the continuous gain in the Naira value will curb surge in consumer prices and boost activities in the manufacturing sector.

http://investorsking.com/nigerias-economy-contracts-1-51-2016/ Lalasticlala Mynd44 seun Dominique

---

Buhari sef

Osibanjo is Working
Buhari is Calling

The non-oil sector is still weeping


Some people will come and blame oil price as if oil price reduced dollar from N525 to N425 in less than 2 weeks.


Some people are clueless and they dont even know it.....but that is none of my business.

Charlie, pass the kpoli this side

The Nigerian economy contracted in the fourth quarter of 2016 for the fourth consecutive quarters.

Only Buhari can achieve this kind of feat.

A round of applause for him please

God please help us, let our Igbo brothers bring down the prices of items when the time is due. Amen

Nigeria on track for economic recovery. FG and CBN efforts are beginning to crystallize. The graph showed rate of contraction is gradually reducing but I will expect new forex policy to further boost economic activities and wane consumer prices going forward.

Undisputed king of repeated failure...1984-1985 and 2015-till date

www.nairaland.com/attachments/4870295_misden_jpeg75475bd2237264031e421002d7706835

Where were all these Wailers before the election?

Anyway we have grown to 40% the only thing that increased during this regimen.

Truth234:
Nigeria on track for economic recovery. FG and CBN efforts are beginning to crystallize. The graph showed rate of contraction is gradually reducing but I will expect new forex policy to further boost economic activities and wane consumer prices going forward.

Nor be only crystalize, na Harpalize, Goldbergize and Orijinize.

From the chart, the worst days are definitely over.

www.nairaland.com/attachments/4937575_gdp_pnge12995fdcab17955e38dd83f477bc56b

NaijaFutbol:
Osibanjo is Working
Buhari is Calling

The non-oil sector is still weeping


Some people will come and blame oil price as if oil price reduced dollar from N525 to N425 in less than 2 weeks.


Some people are clueless and they dont even know it.....but that is none of my business.

Charlie, pass the kpoli this side

The funny part of this comment is that you are one of the clueless ones who doesnt even know it.

obailala:
From the chart, the worst days are definitely over.

www.nairaland.com/attachments/4937575_gdp_pnge12995fdcab17955e38dd83f477bc56b

That's if Buhari and Osinbajo desist from playing politics with the Nigerian economy. When we tell you guys that Buhari's flipflop policies are responsible for the recession, we are often taken as enemies of the state.

OLADD:


That's if Buhari and Osinbajo desist from playing politics with the Nigerian economy. When we tell you guys that Buhari's flipflop policies are responsible for the recession, we are often taken as enemies of the state.

Which politics exactly are you referring to? Buhari's policy is what ensured that Nigeria's economy is hinged on only one commodity right?

If you want me to school you on what's really going on, I can. So please stop boring me with these your 'Buhari this Buhari that' shallow analysis of the economy.

obailala:
Which politics exactly are you referring to? Buhari's policy is what ensured that Nigeria's economy is hinged on only one commodity right?

If you want me to school you on what's really going on, I can. So please stop boring me with these your 'Buhari this Buhari that' shallow analysis of the economy.

I deliberately mentioned your post for the purpose of being "schooled". Did you read the part of the NBS report that spoke about haphazard production activity in the oil sector as a result Niger Delta agitations? Was Buhari's thoughtless grandstanding on military approach rather than dialogue, not responsible for that? What about his forex policy that favours the elite, stifling the manufacturing sector of funds needed for raw material importation and preventing them from operating at optimal capacity? Is the manufacturing sector not a major contribution to the nations GDP? Why did the Naira suddenly rebound against the Dollar if not for the reversal of Buhari's obnoxious forex policy? Face the truth, my friend.

obailala:
The funny part of this comment is that you are one of the clueless ones who doesnt even know it.

I hespere'rit from you. But agree say e pain you! Buhari wasted 2 years of our time giving excuses, prosecuting enemies and protecting his looting friends.

Osibanjo we know.....the "Acting" president.

OLADD:


I deliberately mentioned your post for the purpose of being "schooled". Did you read the part of the NBS report that spoke about haphazard production activity in the oil sector as a result Niger Delta agitations? Was Buhari's thoughtless grandstanding on military approach rather than dialogue, not responsible for that? What about his forex policy that favours the elite, stifling the manufacturing sector of funds needed for raw material importation and preventing them from operating at optimal capacity? Is the manufacturing sector not a major contribution to the nations GDP? Why did the Naira suddenly rebound against the Dollar if not for the reversal of Buhari's obnoxious forex policy? Face the truth, my friend.

Help him. He is working hard to cover up the mess like Buhari's handlers. Our hope is that Osibanjo is cleaning the mess slowing but surely.

OLADD:


I deliberately mentioned your post for the purpose of being "schooled". Did you read the part of the NBS report that spoke about haphazard production activity in the oil sector as a result Niger Delta agitations? Was Buhari's thoughtless grandstanding on military approach rather than dialogue, not responsible for that? What about his forex policy that favours the elite, stifling the manufacturing sector of funds needed for raw material importation and preventing them from operating at optimal capacity? Is the manufacturing sector not a major contribution to the nations GDP? Why did the Naira suddenly rebound against the Dollar if not for the reversal of Buhari's obnoxious forex policy? Face the truth, my friend.

Oh yes buhari's approach aggravated the Niger Delta bombings, but at least he has since reversed on that approach hence we haven't heard cases of bombings in close to 4 months.

Then for the forex policy which you claimed was changed, this is the very point where I called you out. To the best of my knowledge and as a matter of fact, nothing has changed and we still practice a multitude of dollar rates. The appreciation of the Naira seen last week is principally because the CBN resumed disbursement of forex into the market and that is not a new policy; this isn't the first time in the last 2 years that the Naira would suddenly appreciate following the CBN's injection of forex into the system, but then, you cannot give what you dont have. About 3 months ago, in order to rebuild up the reserves which had dropped to dangerously low levels (~$23bn), the CBN severely cut the disbursement of forex into the market and this is what put the recent pressure on the Naira which pushed it up to N520. With the reserves now built up close to $30bn, the CBN simply resumed disbursements and this is what led to the recent appreciation (not any new policy or 'obnoxious' policy reversal as you claim). Hopefully with oil price now averaging $55 and oil production now over 2million bbls, it may be possible for the CBN to sustain the weekly injection of forex into the system to continue appreciating the Naira without our reserves dropping to the very low levels again.

In summary, there was no new spectacular policy or reversal of any 'obnoxious' policy; except you are saying the policy is Buhari saving money in the reserves for 3 months and then now injecting the saved FX back into the system to appreciate the Naira. You can't give what you don't have and the CBN wouldn't have been able to inject FX last week into the economy if it didn't save up in the last 3 months.. Of course the only thing which people who are ignorant of the happenings can see is that "the resumption of FX injection happened when Buhari is away, so therefore it is a reversal of Buhari's policy by osinbajo and it is appreciating the naira."

cc: NaijaFutbol

obailala:
Oh yes buhari's approach aggravated the Niger Delta bombings, but at least he has since reversed on that approach hence we haven't heard cases of bombings in close to 4 months.

Then for the forex policy which you claimed was changed, this is the very point where I called you out. To the best of my knowledge and as a matter of fact, nothing has changed and we still practice a multitude of dollar rates. The appreciation of the Naira seen last week is principally because the CBN resumed disbursement of forex into the market and that is not a new policy; this isn't the first time in the last 2 years that the Naira would suddenly appreciate following the CBN's injection of forex into the system, but then, you cannot give what you dont have. About 3 months ago, in order to rebuild up the reserves which had dropped to dangerously low levels (~$23bn), the CBN severely cut the disbursement of forex into the market and this is what put the recent pressure on the Naira which pushed it up to N520. With the reserves now built up close to $30bn, the CBN simply resumed disbursements and this is what led to the recent appreciation (not any new policy or 'obnoxious' policy reversal as you claim). Hopefully with oil price now averaging $55 and oil production now over 2million bbls, it may be possible for the CBN to sustain the weekly injection of forex into the system to continue appreciating the Naira without our reserves dropping to the very low levels again.

In summary, there was no new spectacular policy or reversal of any 'obnoxious' policy; except you are saying the policy is Buhari saving money in the reserves for 3 months and then now injecting the saved FX back into the system to appreciate the Naira. You can't give what you don't have and the CBN wouldn't have been able to inject FX last week into the economy if it didn't save up in the last 3 months.. Of course the only thing which people who are ignorant of the happenings can see is that "the resumption of FX injection happened when Buhari is away, so therefore it is a reversal of Buhari's policy by osinbajo and it is appreciating the naira."

cc: NaijaFutbol

My friend, let's try as much as possible to be sincere when national issues are discussed. I am sure you know deep down within you that the plummeting reserve was not responsible for this govt's flappy forex policy. At departure in May 2019, Jonathan left a reserve of $29.6b which grew to $30 or thereabout, few weeks ago. So, what has changed?

The truth is that Buhari's govt is fond of taking decisions without considering its implications. They tried to control demand for some imported items by restricting access to dollars forgetting that people would invade the parallel market as an escape route. That was the genesis of the plunge in the value of naira.

Before deciding to place restrictions on the 41 so-called luxury items (which they have now relaxed), govt should have enhanced local production to a significant level thereby foreclosing the possibility of panic buying and crazy dollar rush.

OLADD:


My friend, let's try as much as possible to be sincere when national issues are discussed. I am sure you know deep down within you that the plummeting reserve was not responsible for this govt's flappy forex policy. At departure in May 2019, Jonathan left a reserve of $29.6b which grew to $30 or thereabout, few weeks ago. So, what has changed?

The truth is that Buhari's govt is fond of taking decisions without considering its implications. They tried to control demand for some imported items by restricting access to dollars forgetting that people would invade the parallel market as an escape route. That was the genesis of the plunge in the value of naira.

Before deciding to place restrictions on the 41 so-called luxury items (which they have now relaxed), govt should have enhanced local production to a significant level thereby foreclosing the possibility of panic buying and crazy dollar rush.

Bro, I honestly feel tired, completely weakened having to explain some of these things to people like you because I know you are well enlightened, but you have simply chosen to act like you don't comprehend simply things all because of sentiments.

Yes, several policies of the admin aren't good, but it would make a lot of sense if we could just remain focused, put the unnecessary sentiments aside for just one moment and then address issues 'as they are' instead of how we want them to look. I am tired of having to sound like I am defending bad policies such as the maintenance of multiple exchange rates by the CBN/FG, the fact is that I am not. But for once like I said, put the sentiments aside and call a spade a spade.

A little background... Nigeria has an inordinate thirst for imported goods from basic petroleum products to the least of the items we eat; this means a high demand for forex. Nigeria gets over 90% of its forex from oil sales and with the oil crash, the primary source of our forex was cut by more than half. Like you said, GEJ left about $28.6bn specifically in the reserves as at May 2015 when he handed over. A question for you is, do you know how much was in that reserve 6 months before that handover date?... There was about $38.6 billion in the reserves but it crashed rapidly within 6 months to $28.6bn because while the FG/CBN kept issuing forex 'normally' as if nothing was wrong (in a bid to save the Naira), the inflow of forex into the reserves had dwindled seriously (due to the oil crash) leaving a negative balance.

Meanwhile at the time in question (Nov 2014 - May 2015), oil still sold averagely above $60. Another question for you is, if we could be losing about $1.67billion monthly from the reserves when oil still sold for over $60, what do you think would have happened to Nigeria if the forex restrictions were not enforced having in mind that the oil crash continued to as low as $28/barrel?... Do you know what happens to an import dependent country when its forex reserves drop to zero? Google Venezuela to get an insight.

So I am completely sick and tired of people still saying forex restrictions by Buhari led us to the present mess because while that may be correct, one would have expected these overnight economists to be gracious enough to also tell us if Nigeria really had another option at the time considering that Nigeria was fast running out of reserves.

obailala:
Bro, I honestly feel tired, completely weakened having to explain some of these things to people like you because I know you are well enlightened, but you have simply chosen to act like you don't comprehend simply things all because of sentiments.

Yes, several policies of the admin aren't good, but it would make a lot of sense if we could just remain focused, put the unnecessary sentiments aside for just one moment and then address issues 'as they are' instead of how we want them to look. I am tired of having to sound like I am defending bad policies such as the maintenance of multiple exchange rates by the CBN/FG, the fact is that I am not. But for once like I said, put the sentiments aside and call a spade a spade.

A little background... Nigeria has an inordinate thirst for imported goods from basic petroleum products to the least of the items we eat; this means a high demand for forex. Nigeria gets over 90% of its forex from oil sales and with the oil crash, the primary source of our forex was cut by more than half. Like you said, GEJ left about $28.6bn specifically in the reserves as at May 2015 when he handed over. A question for you is, do you know how much was in that reserve 6 months before that handover date?... There was about $38.6 billion in the reserves but it crashed rapidly within 6 months to $28.6bn because while the FG/CBN kept issuing forex 'normally' as if nothing was wrong (in a bid to save the Naira), the inflow of forex into the reserves had dwindled seriously (due to the oil crash) leaving a negative balance.

Meanwhile at the time in question (Nov 2014 - May 2015), oil still sold averagely above $60. Another question for you is, if we could be losing about $1.67billion monthly from the reserves when oil still sold for over $60, what do you think would have happened to Nigeria if the forex restrictions were not enforced having in mind that the oil crash continued to as low as $28/barrel?... Do you know what happens to an import dependent country when its forex reserves drop to zero? Google Venezuela to get an insight.

So I am completely sick and tired of people still saying forex restrictions by Buhari led us to the present mess because while that may be correct, one would have expected these overnight economists to be gracious enough to also tell us if Nigeria really had another option at the time considering that Nigeria was fast running out of reserves.

That's it! We are so fixated on this rethoric of "we don't have any other alternative". This is in responce to the last paragraph of your post. APC as an opposition party had all the time in this world to fashion out alternative ways of running govt before coming to power. They knew the country's reserve was aiming southward as a result of dwindling oil revenue months before taking over. At inception, instead of emptying the treasury to governors in the name of bailout, the funds should have been given out as lifelines to the non-oil sectors which constitutes a large chunk of the country's GDP. That would have helped local production to a great level, boosted local supply and reduced import. Do you know the significance of this? The mad rush for dollars engineered by the CBN restriction policy would have been nonexistent while, maybe, the country wouldn't have plunged into recession. I rest may case here.

OLADD:


That's it! We are so fixated on this rethoric of "we don't have any other alternative". This is in responce to the last paragraph of your post. APC as an opposition party had all the time in this world to fashion out alternative ways of running govt before coming to power. They knew the country's reserve was aiming southward as a result of dwindling oil revenue months before taking over. At inception, instead of emptying the treasury to governors in the name of bailout, the funds should have been given out as lifelines to the non-oil sectors which constitutes a large chunk of the country's GDP. That would have helped local production to a great level, boosted local supply and reduced import. Do you know the significance of this? The mad rush for dollars engineered by the CBN restriction policy would have been nonexistent while, maybe, the country wouldn't have plunged into recession. I rest may case here.

Nigeria depends so so so much on imported goods so even at N1000 to a dollar, there would still be a mad rush for the dollar. Cmon man, we import virtually every drop of petrol and kero and diesel we use in this country. And unlike many other nations that need these products for just transportation, our power supply in Nigeria is over 70% dependent on these same products which we import.

You may say we are focused on the 'no alternative' rhetoric, but guess what?... it can never be overemphasised that we had no immediate alternatives. Even the so called bailout funds you highlighted as a possible solution wouldnt have been able to scratch the surface.

Again, regarding the bailout funds, while I agree with you that the funds could have been used for great things, do you really know the impact of 27 out of 36 states being unable to pay salaries in a nation like Nigeria where govt is the biggest employer of labour?

obailala:
Nigeria depends so so so much on imported goods so even at N1000 to a dollar, there would still be a mad rush for the dollar. Cmon man, we import virtually every drop of petrol and kero and diesel we use in this country. And unlike many other nations that need these products for just transportation, our power supply in Nigeria is over 70% dependent on these same products which we import.

You may say we are focused on the 'no alternative' rhetoric, but guess what?... it can never be overemphasised that we had no immediate alternatives. Even the so called bailout funds you highlighted as a possible solution wouldnt have been able to scratch the surface.

Again, regarding the bailout funds, while I agree with you that the funds could have been used for great things, do you really know the impact of 27 out of 36 states being unable to pay salaries in a nation like Nigeria where govt is the biggest employer of labour?

My man there's no justification whatsoever for the bailout to the governors. In fact, that singular decision signaled the beginning of Buhari's woes. The States suddenly saw themselves as toddlers who should be spoonfed instead of fending for themselves.Buhari should have stood his ground by asking the prodigal governors to account for their respective allocations in the last 2 years before been considered for bailouts, if necessary. With regards to oil import expenditure what happened to the modular refineries promised the nation 15 months ago? This govt doesn't deserve any pity.

OLADD:


My man there's no justification whatsoever for the bailout to the governors. In fact, that singular decision signaled the beginning of Buhari's woes. The States suddenly saw themselves as toddlers who should be spoonfed instead of fending for themselves.Buhari should have stood his ground by asking the prodigal governors to account for their respective allocations in the last 2 years before been considered for bailouts, if necessary. With regards to oil import expenditure what happened to the modular refineries promised the nation 15 months ago? This govt doesn't deserve any pity.

The govt gave licenses to 23 qualifying oil and gas investors to build modular refineries since early 2016, we haven't heard anything from those investors till date. I'm still not sure I understand how or why you are now blaming the govt for the decisions of our big oil magnate who prefer importation to building refineries.

obailala:
The govt gave licenses to 23 qualifying oil and gas investors to build modular refineries since early 2016, we haven't heard anything from those investors till date. I'm still not sure I understand how or why you are now blaming the govt for the decisions of our big oil magnate who prefer importation to building refineries.

If that is the case can we conveniently conclude that nothing has changed in terms of governance in Nigeria? Can we also infer that the only deference between PDP and APC is just the nomenclature? Past administrations also gave out licences to investors without fruition until APC bombed into the scene with the chant of change. Are you suggesting we should now treat the APC govt with kid gloves and exonerate them from the blame of failing to do due diligence and providing enabling environment before issuing the licences in the first place? Where's the coveted change? My friend, you'll have to work round the clock to defend the incompetence and naivety of this government.