Nigeria enters recession for second time in four years

Nigeria, the largest economic power on the African continent, entered recession for the second time in four years, after its gross domestic product contracted for the second consecutive quarter. The GDP of Nigeria, an oil-producing country, contracted by 3.62% in the third quarter of 2020, after having already shrunk by 6% in the previous quarter, the Bureau of Statistics said on Saturday.

“Over the first nine months of 2020, cumulative GDP is therefore down by 2.48%,” he added. The Bureau of Statistics attributed this development to falling oil prices as well as the negative impact on the economy of the novel coronavirus epidemic. The contribution of oil to GDP contracted in the third quarter by 13.89% compared to a drop of 6.63% in the second quarter of 2020.

At the same time, non-oil economic activities fell by 2.51%. The decrease was 6.05% in the second quarter. Nigeria’s economy was previously declared in recession in 2016, for the first time in two decades. It recovered in 2017 but has been slowing down since. The International Monetary Fund said it projects Nigeria’s GDP to decline by 5.4% for 2020, while the government is forecasting a contraction of 8.9%.

The country is Africa’s largest oil producer, with around two million barrels produced per day, but the Covid-19 epidemic and falling fuel prices have reduced production to around 1.4 million. barrels.