GDP Report: Udoma Hails Growth Of Non-Oil Sector

The Minister of Budget and National Planning, Senator Udoma Udo Udoma, says the federal government is encouraged by the “continuing” growth recorded in the non-oil sector, following release of the latest GDP report.

Recall that the National Bureau of Statistics (NBS), on Monday, released the second quarter GDP Growth numbers, which showed that the non-oil sector grew by 2.05 percent in the second quarter of 2018.

According to the report, the non-oil growth was driven by Transportation (road, rail water and air) which grew by 21.76%, supported by Construction 7.66% and Electricity 7.59%.

Other non-oil sectors that drove growth in the second quarter include Telecommunications which grew by 11.51%, Water supply and Sewage 11.98% and Broadcasting by 21.92%.

In a statement signed by Akpandem James, Special Adviser to the minister, on Monday, in Abuja, Udoma said the non-oil sector growth indicates that the implementation of the targeted policies and programmes of the Economic Recovery and Growth Plan (ERGP) is yielding positive results.

The Minister said that he was happy to see that the Nigerian economy has continued to register positive growth in the first and second quarters of the year in spite of the security and other challenges it faces.

He emphasized that the focus of the ERGP is on diversifying the economy away from dependence on the oil and gas sector and was encouraged that efforts are yielding fruits by the continuing growth in the non-oil sector.

According to him, “this 2.05% growth in the non-oil sector represents the strongest growth in the non-oil GDP since the fourth quarter of 2015”.

Udoma regretted that there was a slight drop in real GDP growth rate for the second quarter principally as a result of the contraction in the oil sector.

The Oil and Gas sector contracted by -3.95% in the second quarter of 2018 compared to a growth rate of 14.77% recorded in the first quarter of 2018 and 3.53% in the corresponding period in 2017.

He attributed the contraction in the Crude oil and Gas sectors to some production issues which are being addressed by the Nigerian National Petroleum Corporation.

“For instance, average crude oil production was only 1.84 million barrels a day in Q2 2018 as opposed to an average production of 2 million barrels a day in Q1 2018. He is optimistic that once these issues are addressed we should be able to, once more, achieve positive growth in the oil and gas sector.

“As he has repeatedly emphasised, the Nigerian economy needs growth from both the oil, as well as the non-oil sectors, to achieve its ERGP growth targets.

“Another area of concern for Government was the slightly weaker growth in the Agriculture sector which slowed to 1.19% in the second quarter in 2018 compared to 3.0% in the first quarter of 2018.This is partly attributable to security challenges mainly in the North East and North Central zones.

“These security challenge affected activities of farmers with the resultant impact on commodity output; but he indicated that the various measures being taken by government to tackle the situation is already reducing incidents of violent conflicts and other disruptions to farming activity. He therefore expects to see a rebound in growth in the Agriculture sector in subsequent quarters.

“He was happy to see that Industry has continued to maintain a positive growth rate as a result of the performance of Manufacturing and Solid minerals which retained positive growth of 0.68% and 5.24% respectively in the second quarter of 2018; while the Services sector recorded its best GDP performance in nine quarters, growing by 2.12% in the second quarter of 2018 compared to a contraction of -0.47% in the first quarter of the year and of -0.85% in second quarter of 2017,” James said.

Udoma also expressed excitement that the Nigerian economy has continued to attract significant capital inflows.

According to NBS, the total value of capital importation into Nigeria stood at $5.5 billion in the second quarter of 2018, representing a 207.62% increase compared to the second quarter of 2017.

He pointed out that while capital importation declined slightly in the second quarter of 2018, the total for the first half of 2018 at $11.8 billion represents the highest half year capital importation since 2014.

The minister was optimistic that as the federal government intensifies its activities in the implementation of the ERGP, the economy the growth momentum.

Udoma further stated that, “whilst we still have some way to go to achieve the target growth rates of the ERGP, these continuing positive results are signs that we are moving in the right direction”.

He expressed the commitment of the President Buhari-led government to turn Nigeria around and transform it into “a productive country where we grow what we eat, consume what we make and use what we produce”.