Nigeria’s economy grows in first quarter on oil price upward push

© Reuters. FILE PHOTO: A man carries Nigerian naira banknotes at a cattle market in Abuja, Nigeria July 29, 2020. REUTERS/Afolabi Sotunde

By Chijioke Ohuocha

ABUJA (Reuters) – Nigeria’s economy grew 0.5% in the most indispensable quarter, lifted by better excessive production and oil prices, the nation’s statistics office said on Sunday, as activities slowly accomplish momentum after the unhurried easing of coronavirus lockdowns.

Africa’s largest economy, exited its second recession since 2016 in the fourth quarter, despite a tubby-year contraction in 2020.

Nigeria had been grappling with low growth ahead of the coronavirus pandemic precipitated a recession and created gargantuan financing gaps, including dollar shortages and inflation.

“The Q1 2021 growth fee modified into slower than the 1.87% growth fee recorded in Q1 2020 but better than 0.11% recorded in Q4 2020, indicative of a unhurried but continuous restoration,” The National Bureau of Statistics (NBS) said.

Nigeria is inoculating its 200 million voters, but final month directed its areas to discontinuance giving first doses of AstraZeneca (NASDAQ:) vaccines as soon as they spend half their fresh stock, to safeguard provide for a second dose.

The NBS said the non-oil sector, which the authorities is attempting to make the key growth sector, rose 0.79% in the most indispensable quarter. Telecoms, carve production, steady property, food manufacturing and constructing lifted growth in the quarter.

Excessive prices rose above $70/barrel on Tuesday but fell on Wednesday on renewed ask concerns as COVID-19 conditions in Asia rose and fears that rising inflation could perhaps presumably lead the U.S. Federal Reserve to settle rates, which could perhaps presumably limit growth.

Oil, which accounts for around two-thirds of Nigerian authorities income and 90% of distant places alternate, diminished in size 2.21% in the most indispensable quarter as excessive production rose to 1.72 million barrels per day from the fourth quarter.

With weak growth, few demand Nigeria’s central bank to alter interest rates next week.

The bank has pursued an accommodative stance by leaving interest rates on abet. On the opposite hand, dollar shortages hang stoked inflation to a more than 4-year excessive, while a skittish labour market and mounting insecurity hang pressured households.

“Whereas this facets to the likelihood of less assailable growth from the second quarter, it quiet does now not enable for a more sturdy policy response to inflationary pressures,” Razia Khan, chief economist for Africa and the Middle East at Fashioned Chartered (OTC:), said.

Disclaimer: Fusion Media would love to remind you that the strategies contained in this net snarl material is now not essentially steady-time nor merely. All CFDs (shares, indexes, futures) and Forex prices are now not supplied by exchanges but rather by market makers, and so prices could perhaps presumably additionally now not be merely and can fluctuate from the steady market price, that skill prices are indicative and now not appropriate for getting and selling capabilities. Therefore Fusion Media doesn`t hang any accountability for any shopping and selling losses you may perhaps presumably incur attributable to the spend of this details.

Fusion Media or anybody intelligent with Fusion Media will now not derive any criminal responsibility for loss or damage attributable to reliance on the working out including details, quotes, charts and engage/sell signals contained within this net snarl material. Please be fully knowledgeable regarding the hazards and prices connected to shopping and selling the monetary markets, it is one amongst the riskiest investment kinds conceivable.