In real terms, market price gross domestic product (GDP) declined year-on-year by 2.4 per cent in the third quarter of 2016, which was the lowest year on year growth rate in the rebased period (2010 onwards), the National Bureau of Statistics (NBS) said in its Nigerian GDP report (Expenditure and Income Approach).
The report stated that in the third quarter, all components recorded year-on-year declined in real terms other than changes National Disposable Income recorded stronger growth than GDP in the third quarter of 2016, both in real and nominal terms.
This was largely as a result of what the report attributed to ‘Other Current Transfers (net) which increased substantially year-on-year.
Year-on-year growth in domestic compensation of employees was sill negative, but recovered significantly relative to the rate in the previous quarter, which was the lowest on record.
The report noted that the Nigerian economy fell into a recession in the first half of 2016 (according to the conventional definition of two consecutive quarters of negative growth), and this continued into the third quarter.
The GDP component to record the lowest growth rate was General Government consumption; attacks on oil pipelines affected oil output, which in turn impacted on government revenues, but weaker economic conditions also led to lower than anticipated tax revenue.
Investment (Gross Fixed Capital Formation) also declined substantially.
Market price GDP declined slightly more in real terms than basic price GDP, by 2.4 per cent compared to 2.3 per cent in the third quarter of 2016.
“This was as a result of a larger decline in net taxes on products, of 5.0 per cent, which is the difference between the two measures,” the report added.
The GDP expenditure approach measures the final uses of the produced output as the sum of Final consumption, Gross Capital Formation and Exports less Imports.
Consumption of fixed capital—a measure of depreciation of assets—comprises the difference between GDP and Net Domestic Product (NDP).