Nigeria’s economy, Africa’s biggest, expanded at its slowest pace in more than a year in the fourth quarter as oil prices fell.
Growth in gross domestic product slowed to an annual 5.9 percent in the three months to Dec. 31 compared with 6.2 percent in the third quarter, Nigeria’s Abuja-based National Bureau of Statistics said Sunday on its website.
While the oil industry “experienced production and price challenges in the quarter,” average daily crude output rose to 2.18 million barrels from 2.15 million in the period earlier, the statistics office said. The price of Brent Crude oil averaged $77.34 a barrel in the quarter, $32 cheaper than the same period in 2013. The price of the commodity has slipped further, averaging $53.41 a barrel so far this year.
Nigeria, Africa’s biggest oil producer, relies on the commodity for 70 percent of its export income and the industry accounts for about 12.5 percent of GDP. The plunge in the price has helped push down the value of the naira, Nigeria’s currency, by 19 percent against the dollar over the past six months. That’s the biggest decline of 24 African currencies monitored by Bloomberg, before Nigeria holds general elections starting on March 28 after a six-week postponement.
Optimistic Forecast
Oil production remains below the government’s current “optimistic” benchmark of 2.28 million barrels a day and down from a peak of as much as 2.3 million barrels, Gareth Brickman and Catherine Bennett, analysts with Johannesburg-based ETM Analytics, said in an e-mailed note on Monday. Slowing growth in non-oil sectors are adding to economic pressures, they said.
Non-oil industry expansion eased in the quarter to 6.4 percent from 7.5 percent a quarter earlier.
“The naira’s sharp depreciation, topside risks to inflation as a result, uncertainty over the political landscape and tightening monetary and credit conditions looks set to keep the stagflationary pressure on for at least the first half of this year,” Brickman and Bennett said.