Supply disruptions in the oil sector as a result of pipeline vandalism remained a significant challenge to the sector’s contribution to economic output in the second quarter of 2013.
The non-oil sector also slowed as a result of poor electricity supply despite sustaining the nation’s economy in the second quarter.
Data released by the National Bureau of Statistics (NBS) on Friday reveals that the oil sector contributed approximately 12.9 per cent to real gross domestic product (GDP) in the second quarter of 2013, lower than the 14.75 per cent contribution in the first quarter of 2013, and the 13.86 per cent recorded during the second quarter of 2012.
In terms of real growth rate, oil GDP for the second quarter of 2013 stood at -1.15 per cent compared to the -0.54 per cent recorded in the first quarter of 2013 and -0.78 per cent recorded in the corresponding period of 2012.
The average daily production of crude oil in the second quarter of 2013 was recorded at 2.11 million barrels per day, a decline from 2.29 million barrels per day recorded in the first quarter of the year, and 2.38 million barrels per day recorded in the second quarter of 2012.
The NBS also reveals that the non-oil sector recorded 7.36 per cent growth in real terms compared with 7.63 per cent at the corresponding period in 2012, and 7.89 per cent in the first quarter of 2013.
This relative decline was partly attributed to lower electricity generation during the period which had ripple effects on other manufacturing, telecommunications as well as wholesale and retail trade.
Overall, the economy when measured by the real GDP grew by 6.18 per cent in the second quarter of 2013, slower than the 6.56 per cent recorded in the first quarter of 2013 and 6.39 per cent recorded in the corresponding quarter of 2012. The nominal GDP for the second quarter of 2013 was estimated at N9.11 trillion, lower than N9.84 trillion estimated for the corresponding quarter of 2012 and N9.49 trillion recorded in the first quarter of 2013.
While the oil sector experienced production challenges, the non-oil sector output increased in the second quarter of 2013. The non-oil sector growth was driven by growth in activities recorded in the agriculture, airlines, hotels and restaurants as well as building and construction sectors.
Overall, the economy grew at a slower pace in the second quarter, with GDP growth rate of 6.18 per cent, compared to a revised 6.56 per cent growth recorded in the first quarter of the year. That compares with a 6.65 per cent median estimate from six analysts and economists surveyed by Bloomberg.
Africa’s most populous nation with more than 160 million people relies on oil for as much as 95 per cent of export earnings and 80 per cent of government revenue. Nigeria is losing potential earnings from crude due to production losses from theft and vandalism of pipelines, while growth in other non-oil industries including agriculture, trade and services is helping support the economy, the Central Bank said in July.
Output fell to a 3 1/2-year low of 1.81 million barrels of oil in March and it reached 2.02 million barrels as of last month, according to data compiled by Bloomberg.
Nigeria’s $262.6-billion economy is forecast by the International Monetary Fund to expand 7.2 per cent this year from 6.3 per cent last year. The country’s statistics agency plans to release re-calculated GDP figures in November using 2010 as a base year instead of 1990, which will probably increase the reported size of the economy.
Information from Leadership was used in this report.