Nigeria’s economic growth rose to an annual rate of 2.55 per cent in the three months to the end of December, its highest quarterly growth since 2016 recession, according to the National Bureau of Statistics in a statement on Monday.
The Bureau in the release noted that Africa’s largest economy grew 2.27 per cent in 2019 from 1.91 per cent the previous year after struggling to shake off the effects of a 2016 recession that ended in 2017.
However, despite exiting the recession Nigeria’s economy had since been grappling with low growth as government continued to depend hugely on crude oil revenue.
Growth in 2019 was supported by a favourable oil price and higher crude production. The oil sector, which accounts for around two-thirds of government revenue and 90 per cent of foreign exchange, grew 6.36 per cent in Q4.
Crude production hovered at around 2 million barrels per day throughout the year, the statistics office said.
The non-oil sector, which the government is trying to make the main growth sector, rose 2.26 per cent in Q4.
President Muhammadu Buhari, who began a second four-year term in May, has pledged to revive the economy and diversify it away from over-dependence on oil. But investors have been waiting for policy signals that could lift growth.
“Today’s figures still doesn’t show any sign that President Buhari is succeeding in rebalancing Nigeria’s economy,” said John Ashbourne, Africa economist at Capital Economics.
“The pickup in growth was caused by an easing in the contraction of wholesale and retail trade and a boom in the banking sector.”
Last week. the IMF cut its 2020 growth forecast for Nigeria to 2 per cent from 2.5 per cent, citing lower demand for oil due to fears that the coronavirus outbreak in China will cause a slowdown. The Fund said Nigeria was still recovering, but inflation was rising which, along with external shocks, would weaken its foreign exchange reserves due to its deteriorating terms of trade and capital outflows.
Annual inflation in Nigeria rose for the fifth straight month to 12.13 per cent in January, its highest in nearly two years.