August 25, 2023

Nigeria’s annual economic growth rate slowed to 2.51% in the second quarter, data showed on Friday, hurt by a fall in oil production amid a series of reforms by new president Bola Tinubu aimed at reviving Africa’s largest economy.

The data, which marks the 11th consecutive quarter of growth, is the first release since Tinubu embarked on country’s boldest reforms in decades to try to boost output which has been sluggish for several years.

“This growth rate is lower than the 3.54% recorded in the second quarter of 2022 and may be attributed to the challenging economic conditions being experienced,” the National Bureau of Statistics (NBS) said.

Tinubu has scrapped a popular but costly petrol subsidy and lifted foreign exchange trading restrictions. But the action has worsened inflation currently in double-digits, fuelling anger and frustration for a population grappling with a cost of living crisis.

Tinubu at his inauguration in May vowed to expand the economy by at least 6% a year, lift barriers to investment, create jobs and unify the exchange rate, while also tackling rampant insecurity.

He inherited a struggling economy with record debt, shortages of foreign exchange and fuel, a weak naira currency, inflation at a near two-decade high, skeletal power supplies and falling oil production due to crude theft and underinvestment.

Nigeria, Africa’s top oil producer, recorded average daily oil output (NGOIL=ECI) of 1.22 million barrels per day (mbpd) in the second quarter, down from the daily average of 1.43 mbpd registered in the same quarter of 2022.

The dominant oil sector which accounts for the bulk of government revenue and 90% of foreign-exchange reserves, contracted 13.43%.

The NBS said second-quarter growth was driven by the services sector, which grew 4.42% year on year.

REUTERS