Nigeria’s GDP expands by 2.84%; as oil output rises to 2.17mb/d

The Nigerian economy grew by 2.84 per cent in the third quarter of the year (Q3 2015) compared with 2.35 per cent in the previous quarter, the National Bureau of Statistics (NBS) has said.

According to the GDP third quarter report released Monday by the statistical agency, the country’s growth rate for Q3 was higher by 0.49 per cent compared to the previous quarter but lower by 3.38 per cent in the corresponding quarter of 2014.

Quarter-on-quarter, the real GDP increased by 9.19 per cent, according to NBS.

Nominal GDP at basic prices increased to N24.31 trillion compared to N22.85 trillion in Q2 and N21.04 trillion in the first quarter. Compared to the N22.93 trillion recorded in Q3 2014, nominal GDP increased by 6.02 per cent.

Nominal growth was also higher relative to the growth recorded in Q1 2015 by 0.85 per cent.

Crude oil production in Q3 also increased by 0.17 million barrels per day (mbpd) to 2.17 mbpd from 2.15 mbpd in Q2 2015.

According to NBS, real growth of the oil sector increased by 1.06 per cent (year-on-year) in Q3 2015, higher by 4.65 per cent compared to the corresponding quarter of 2014, and higher than the second quarter when growth declined by 6.79 per cent.

Quarter-on-quarter, growth also increased by 14.35 per cent. As a share of the economy, the oil sector represented 10.27 per cent of total GDP, down by 0.18 per cent from the corresponding period of 2014 and up by 0.46 per cent up from the second quarter of 2015.

NBS stated that the non-oil sector grew by 3.05 per cent in real terms in Q3, adding that growth in the sector was largely driven by crop production (agriculture), financial services, telecommunications and trade, among others.

However, this was 4.45 per cent lower than the corresponding quarter in 2014 and marginally lower than Q2 2015 estimates.

In real terms, the non-oil sector contributed 89.73 per cent to the nation’s GDP, marginally higher than the 89.55 per cent in Q3 2014 but lower than the 90.20 per cent recorded in Q2 2015.

Meanwhile, the Central Bank of Nigeria (CBN) has threatened to impose more penalties on banks and other financial institutions that render false returns as well as those that do not comply with its policies.

The Deputy Governor (Corporate Services), CBN, Mr. Adebayo Adelabu, stated this at the 2015 stakeholders’ forum of the Bank Directors Association of Nigeria (BDAN) held in Lagos on Tuesday.

While stressing that rendition of false returns by banks would no longer be tolerated by the central bank, Adelabusaid such act affects national planning and other data required for taking crucial economic decisions.

The central bank recently fined three commercial banks for not remitting the stipulated funds into the treasury single account (TSA).

“There is no amount of penalty that is imposed on a bank that rendered false returns that is too much. The TSA has come to stay and the CBN will make sure it works. I know that the huge penalties that the CBN levelled on a couple banks recently have been a source of concern and subject of discussion everywhere.

“Bank directors need to pick interest in this. All we were used to in the past was the recommendation from BOFIA. All they would tell you is ‘let’s break the law and pay CBN N2 million in line with the Bank and Other Financial Institutions (BOFIA) Act.’

“But today, we are in an era of zero tolerance. Some of the offences that those banks committed actually warranted even the chief executive officers to be removed. Not just the CEOs, the chief finance officers, treasurers and even the entire management board. But we know the systemic implication of this on the industry at this crucial time of our economy. But we believe with the heavy fines, the board should ask questions,”Adelabu said.

Speaking further, the deputy CBN governor said: “The primary regulator as far as the industry is concerned is the Central Bank of Nigeria. Today, the fear of the CBN is the beginning of wisdom. Unlike we used to have in the past, it is no longer the headmaster versus pupils relationship, today, it is a collaborative relationship. But the central bank as the regulator is being misunderstood most of the time.

“Banks have to proactively manage their relationship with the central bank and there are various ways of doing that. But what annoys most regulators most is for bank directors to feign ignorance of what their executive management is doing. As far as the CBN does not allow board members to be involved in the day-to-day running of banks, we expect that there would be mechanisms put in place to ensure that you (bank directors) are on top of the banks so that nothing will take you by surprise.”

He also urged bank directors to always take out time to study CBN’s periodic audit report on their respective institutions so as to be better informed on the events in the banks.

While speaking on the economy, Adelabu, who represented the CBN Governor, Mr. Godwin Emefiele, at the event, noted that the Nigerian economy “is a very tough economy to manage,” adding that as a result of the slump in price of crude oil, “the country is in a difficult situation.”

“Whether we like it or not, we have become poorer than we used to be and we all know the reason for that- the price of the only product that we rely on has dropped. Today, our reserves is a little below $30 billion and we know the volatile funds that are in there. So, if there is any circular that you feel is affecting your business, please bear with us,” added.

(This Day)