The National Bureau of Statistics has released the much-awaited Gross Domestic Product figures for the second quarter of 2016 with the GDP growth rate sliding further from -0.36 per cent in the first quarter to -2.06 per cent year-on-year.
The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s GDP. So, this confirms that the Nigerian economy is formally in recession.
A recession is defined as a significant decline in activities across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale retail trade.
In the GDP report released by the NBS, the bureau said: “In the second quarter of 2016, the nation’s Gross Domestic Product declined by -2.06 per cent (year-on- year) in real terms.
“This was lower by 1.70 per cent points from the growth rate of –0.36 per cent recorded in the preceding quarter, and also lower by 4.41 per cent points from the growth rate of 2.35 per cent recorded in the corresponding quarter of 2015. Quarter on quarter, real GDP increased by 0.82 per cent.
During the quarter, nominal GDP was N23,483,954.78 million (in nominal terms) at basic prices. This was 2.73% higher than the Second Quarter 2015 value of N22,859,153.01 million. This growth was lower than the rate recorded in the Second Quarter of 2015 by 2.44% points.”
According to World Bank data, the last time Nigeria had this magnitude of economic decline was under the regime of Ibrahim Babangida, when the economy recorded consecutive decline of 0.51 percent and 0.82 percent in first and second quarters of 1987.