Nigeria, Africa’s most populous country, is in an economic recession and the data is out to prove it. New figures released by the country’s National Bureau of Statistics (NBS) have officially confirmed that Nigeria is indeed in a recession.
The Nigerian economy has suffered a severe slump in recent months that has seen many businesses fold up and several thousand workers be forced back in to the labour market.
A fall in crude oil prices, rising militancy in the country’s Niger Delta region, and poor investor confidence have combined to slow growth and weaken the economy of Africa’s biggest crude oil exporter.
The new NBS figures show that the Nigerian economy contracted by 2.06 percent in the second quarter of 2016, sliding further from a negative growth of 0.36 percent, which was experienced in the first quarter of the year.
These percentages indicate that Nigeria has had two successive quarters of negative economic growth; a country is considered to be going through a recession if it experiences two consecutive quarters or six straight months of negative economic growth.
In July, Nigeria’s Finance Minister Kemi Adeosun, appearing before a committee of the country’s lawmakers, admitted that “things were tough” with the Nigerian economy before describing the country’s situation as in a “technical recession.”
In August, the International Monetary Fund (IMF) released new figures showing that South Africa had overtaken Nigeria to reclaim the top position as Africa’s biggest economy. The IMF report says Nigeria lost its position as a result of the fall in value of the naira, which had weakened severely against the dollar, losing more than a third of its value over the last six months.
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There appears, however, to be a few positives for the Nigerian economy in the midst of all its current economic woes. To begin with, the NBS figures show the recession is not as deep as previously feared, with basic performance indicators proving to be slightly better than initial IMF predictions.
Also the slump in crude oil prices and the fall in the value of the naira appear to have prompted activity and renewed interest in other sectors of Nigeria’s economy, with agriculture, manufacturing, and mining showing relatively strong performances in the period under review.
According to the NBS, agriculture grew by 4.53 percent in the second quarter of 2016 compared to 3.09 percent in the first quarter.
In the decades following the discovery of vast crude oil deposits in Nigeria, the country’s economy had come to be almost completely dependent on the receipts from the sale of crude oil, even as economic experts repeatedly warned of the dangers of tying the fortunes of the economy to a single export commodity.
Before now, successive Nigerian administrations had made only half-hearted efforts to diversify the economy, however, some analysts are now of the opinion that the current recession will probably force the hand of the authorities for good.