The Central Bank of Nigeria (CBN) has reported that the country’s Gross Domestic Product (GDP) recorded a growth of 13.03 per cent in the second half of 2014, and that Agricultural sector accounts for the expansion in the non-oil sector which is the back-bone of the growing economy. The bank also revealed that the non-oil sector recorded 15.06 per cent growth in real terms in the second half of 2014, compared with the 7.04 per cent decline in the preceding first half.
These facts were contained in the CBN Financial Stability Report for December 2014 published on the apex bank’s website. According to the report, growth in the non-oil sector has remained significant since in recent times, a proof of positive result of government’s drive for the diversification of the economy. Since the rebasing of the economy in April 2014, the economy has witnessed expanding GDP that underscores the potential of the non-oil sector especially in Service, Industry and Agriculture sectors.
Quoting data by the National Bureau of Statistics (NBS), the CBN report confirmed the receding impact of the oil and gas sector in terms of contribution to GDP, notwithstanding that the sector is the country’s major revenue and foreign exchange earner.
The report read in part, “Provisional data from the National Bureau of Statistics (NBS) indicated that the domestic economy expanded further in the second half of 2014.
Gross Domestic Product (GDP) measured in real terms recorded a growth of 13.03 per cent over the level in the preceding half year, in contrast to the 6.14 per cent decline in the first half against end December 2013 performance. “It was, however, 0.31 percentage point below the 13.34 per cent recorded in the corresponding period of 2013.
Overall, growth in real GDP continued to be buoyed by sustained expansion in the non-oil sector, though it was moderated by the lull in the oil sector, owing to the drastic fall in the international oil prices.”
The report gave insight into the strong growth in the non-oil sector which holds great prospect for the economy to create jobs and have adequate capacity building put in place to drive the economy.
For instance, the report made reference to the impact of emphasis on crop production which dominates agricultural activities across the country. It said that the non-oil sector contributed 90.31 per cent to the GDP growth in the period under review, and that the agriculture sector recorded the highest level of growth at 40.5 per cent, followed by the services sector at 10.4 per cent, while trade and manufacturing followed at 6.9 and 3.6 per cent respectively.
“The non-oil sector recorded 15.06per cent growth in real terms in the second half of 2014, compared with the 7.04 per cent decline in the preceding first half. The growth in the non-oil sector was driven mainly by significant expansion in the agriculture sector, particularly, the crop production activities.
“Correspondingly, the contribution of the non-oil sector stood at 90.31 per cent, indicating an increase of 1.6 and 0.7 percentage points over the 88.71 and 89.57per cent recorded in the preceding half year and corresponding period of 2014, respectively. In real terms, the agriculture sector recorded the highest level of growth at 40.5 per cent, followed by the services sector (10.4%), trade (6.9%), and manufacturing (3.6%).
“In terms of sectoral contribution, the services sector accounted for the largest share (35.7%) of real GDP. This was followed by agriculture (25.2%), trade (16.1%), crude petroleum, natural gas and solid minerals (10.0%), manufacturing (9.5%),and construction (3.5%).” Commenting on the oil and gas, the report confirmed that the sector witnessed challenges related to falling oil prices during the period, notwithstanding increase recorded in crude oil production.
The CBN noted that the decline in oil contribution to GDP was recorded during the first half of 2014. The report stated, “Activities in the oil sector witnessed challenges, arising from falling oil prices during the second half of 2014.Although average daily production of crude oil rose to 2.18 million barrels per day (mb/d) in the fourth quarter, from 2.15 mb/d in the third quarter, oil as a percentage of GDP declined by 2.9 per cent in contrast to 1.6 per cent growth in the first half.
“Further analysis also indicated that the oil sector contributed 9.7 per cent to real GDP in the second half, showing 1.59 and 0.73 percentage points decline below the contributions in the preceding half year and the corresponding period of 2013, respectively.”