The World Bank has lowered its growth forecast for Nigeria’s economy in 2018 to 1.9 percent as the growth continued to downsize in the oil and agriculture sector.
The latest estimate is 0.2 percent points lower than 2.1 percent growth the global financial body earlier projected for the nation’s economy in April.
The world bank said its decision to cut Nigeria’s 2018 growth estimate was occasioned by the reduction in the production volume of crude oil, the country’s main source of revenue, and contraction in the agricultural sector of the economy which was largely driven by the herder-farmer clashes.
“In Nigeria, declining oil production and contraction in the agriculture sector partially offset a rebound in the services sector and dampened non-oil growth, all of which affected economic recovery.
“Nigeria’s recovery faltered in the first half of the year. Oil production fell, partly due to pipeline closures.
“The agriculture sector contracted, as conflict over land between farmers and herders disrupted crop production, partially offsetting a rebound in the services sector and dampening non-oil growth,” the bank stated.
According to the National Bureau of Statistics (NBS), the oil sector of the economy contracted by -3.95 percent in the second quarter of 2018 from a year earlier, while the non-oil sector grew by 2.05 percent in real terms during the reference quarter.
The drop in the oil sector impeded growth in the Nigerian economy to 1.50 percent in the quarter down from 1.95 percent recorded in the preceding quarter.
Available statistics from NBS shows that the nation’s agricultural sector grew by 1.19 percent from a year earlier in real terms in the second quarter of 2018, representing a decrease by –1.82 percent points from the corresponding period in 2017.
The data further shows that Nigeria’s average daily oil production volume dropped in Q2 2018 to 1.84 million barrels per day after recording an average production volume of two (2) million barrels per day in the previous quarter.
The contraction in the Crude oil and Gas sectors was attributable to some production issues which, according to the Minister of Budget and National Planning, Sen. Udoma Udo Udoma, were being addressed by the Nigerian National Petroleum Corporation (NNPC).
But the Minister of State for Petroleum, Ibe Kachikwu, had last month noted that the decision to raise or cut production volume would be largely dependent on the prices of crude in the international market.
This indicates that there may soon be a rebound in the country’s crude oil production volume as the Brent crude, against which Nigeria’s oil is priced, hit its highest level of $84 per barrel since November 2014 last Monday.
The development was occasioned by supply concerns in the international market ahead of United States sanctions on Iran’s oil sector expected to take effect from next month.