ABUJA (Reuters) – Nigeria’s economic growth rose to an annual rate of 2.28% in the three months to the end of September after the production of its main export commodity, crude oil, rose to a more than three year high, the statistics office said on Friday.
A worker walks past excavators at a construction site of the Dangote refinery in Ibeju Lekki district, on the outskirts of Lagos, Nigeria August 7, 2019. REUTERS/Temilade Adelaja
The economy, Africa’s largest, expanded by 0.17% in the previous quarter and 0.47% in the same period a year earlier. The country has struggled to shake off the effects of a 2016 recession that ended the following year.
Growth rates in Nigeria have been bouncing back this year, though from a low base, after the oil sector, which accounts for around two-thirds of government revenue and 90% of foreign exchange, shrugged off its negative performance in the first quarter.
Crude production in the third quarter stood at 2.04 million barrels per day, its highest since the first quarter of 2016, the statistics office said.
Friday’s data release comes ahead of the central bank’s announcement of its main interest rate on Tuesday and days after the statistics office said annual inflation was at a 17-month high in October.
Nigeria recorded the highest quarterly growth in September since the last quarter of 2018 as the oil sector rose 6.49%. The non-oil sector rose 1.85% during the period.
Razia Khan, chief economist for Africa and the Middle East at Standard Chartered, welcomed the oil sector performance but added that it raises concerns that Nigeria could come under more pressure to adhere to its OPEC quota.
The non-oil sector is showing signs of recovery but is inadequate for Nigeria’s potential, Khan said.
“Given the hoped-for faster passage of the 2020 budget, and efforts to boost private sector credit, we expect more of a recovery to emerge all-round in 2020,” Khan said.
The central bank has been trying to boost growth by forcing commercial banks to lend to stimulate the economy but it has also kept benchmark interest rates high and liquidity tight in a bid to support the currency and wade off inflation.
The central bank has forecast growth of 3% for 2019 while the IMF expects the year to finish off at 2.3%.
Reporting by Chijioke Ohuocha; Editing by William Maclean and Frances Kerry