Photo taken on March 7, 2017 shows the scene of a ground breaking ceremony for a railway project in Lagos, Nigeria. (Xinhua/Jiang Xintong)
by Olatunji Saliu
ABUJA, Sept. 6 (Xinhua) -- Following a year-long economic gloom in Nigeria, a silver lining came Tuesday when indications emerged that the economy had recovered from its worst recession in more than two decades.
Data released by the National Bureau of Statistics Tuesday showed a notched-up growth of 0.55 percent in the second quarter of 2017, from -0.91 percent in the first quarter of 2017 and -1.49 percent in the second quarter in 2016.
The economic recovery was driven by improved performance in the oil, agriculture, manufacturing, and trade sectors.
The economy of Nigeria, the most populous country in Africa, had contracted for five consecutive quarters since the first quarter of 2016, slipping into recession for the first time in more than two decades in August 2016.
The economy had depended on oil, its mainstay, for 70 percent of state revenues and 90 percent of export earnings.
Nigeria's economic challenges were compounded by lower oil prices on the international market since mid-2014, causing a huge fall in government revenues, weakened local currency, and dollar shortages.
Its economic woes were exacerbated by militant attacks on key oil infrastructure in the restive Niger delta.
HOW THE ECONOMY REBOUNDED
Growth in the oil sector, which had been negative since the fourth quarter of 2015, became positive in the second quarter of 2017, rising by 1.64 percent as compared to -15.60 in the first quarter of 2017. It recorded an increase of up to 17 percentage points.
The improvement, according to local analysts, was partly due to the fact that oil prices, which improved slightly from the lows of last year, had been relatively steady amid increased production levels.
The non-oil sector grew by 0.45 percent in the second quarter of 2017, a second successive quarterly growth after growing 0.72 percent in the first quarter of the year.
Although the increase was not quite as strong as it was in the second quarter of 2016, it reflected continuing fragility of economic conditions.
According to government spokesman Laolu Akande, given that nearly 60 percent of the non-oil sector's contribution to the gross domestic product is influenced by the oil sector, growth in the oil sector will help boost the rest of the economy.
"The positive growth seen in agriculture, when the rest of the economy was contracting, was maintained at 3.01 percent, which is encouraging, especially if seasonal factors are taken into account," he said.
Manufacturing growth was also positive, at 0.64 percent, although it was lower than the previous quarter's growth of 1.36 percent, a noticeable improvement over the -3.36 percent experienced in the second quarter of 2016 and a continuation of the turnaround of the sector.
The official data showed that solid minerals, one of the main priorities of the government, had continued to grow since the second quarter of 2016, by 2.24 percent.
The overall industry as a whole grew by 1.45 percent in the second quarter of 2017, after nine successive quarters of contraction, starting in the fourth quarter of 2014.
The development was somewhat overshadowed by the continued decline in the services sector, which accounts for 53.7 percent of GDP.
Electricity and gas, and financial institutions, grew by 35.5 percent and 11.78 percent respectively in the second quarter of this year.
GDP figures indicated cautious optimism, especially as inflation had continued to fall, from 18.72 percent in January 2017 to 16.05 percent in July 2017.
Nigeria's foreign exchange reserves had similarly improved from a low of 24.53 billion U.S. dollars in September 2016 to about 31 billion dollars in August 2017.
Nigeria's capital importation grew by 95 percent year-on-year, driven by portfolio and other investments but also notably by foreign direct investment, which increased by almost 30 percent over the previous quarter.
LOCAL ANALYSTS' VIEWS
Most local analysts think the outlook for more growth looks positive for Nigeria.
According to Bismark Rewane, an economic analyst, the economy rebounded partly because there had been improved performance in non-oil sectors of the Nigerian economy in the second quarter.
"The prospects for more robust growth are bright," Rewane said. "I hope the current economic diversification efforts, which see efforts being given to agriculture and mining, will be sustained."
He urged the Nigerian government to intensify efforts in reaching a truce with oil rebels in the Niger Delta region, hoping such agreement would bring about increased oil production.
"If there are no attacks on oil facilities and production is increased and Nigeria earns more money, then the economy will stabilize," he added.
The government said it will intensify the Economic Recovery Growth Plan, which was launched early 2017 to sustain national development.
A presidency statement said the government was working "to achieve desired outcomes including sustained inclusive growth, further diversification of the economy, the creation of jobs, and improved business conditions."
Nigeria's oil output had ramped up to an average of 2 million barrels per day from a low of 1.3 million in 2016, due to the government's ongoing peace talks with oil rebels in the Niger Delta region.
