Nigeria GDP grows, oil output climbs

2012-11-19 16:13

Lagos - Nigeria, Africa's second-biggest economy, grew 6.5% in the third quarter from a year earlier, helped by solid growth in the non-oil economy, data showed on Monday.

GDP growth accelerated slightly from 6.3% in the second quarter of this year, figures from the National Bureau of Statistics (NBS) showed on Monday. Oil output in Africa's biggest producer climbed nearly 6% from the corresponding period a year ago.

Nigeria's economy has been slowing this year due to a slowdown in developed economies that buy Nigerian oil and to the impact of an Islamist insurgency in the north of the country. The government forecasts 6.5% economic growth this year, down from 7.4% last year.

The NBS said the non-oil sector was "still the major driver of the economy", recording 7.6% growth in the third quarter and supported by growth in the building & construction, cement, hotel, restaurant and electricity sectors.

The contribution of oil to the overall economy fell to 13.4%, from 14.3% in the same quarter last year. Oil output rose to 2.52 million barrels per day (bpd), from 2.38 million bpd in the second quarter of this year.

Nigeria is among the world's top 10 oil exporters and holds the world's ninth-biggest gas reserves. Oil accounts for around 80% of government revenues but agriculture is the largest contributor to GDP with a weighting of around 40%.

Inflation remains high and rose marginally in October, to 11.7%, from 11.3% in September. Food inflation accounted for a large portion of the increase, rising to 11.1%, compared with 10.2% in September.

Most analysts expect interest rates to be kept on hold at 12% when the central bank (CBN) announces the monetary policy committee's decision on Tuesday.

Rates have been on hold since November last year as the CBN prioritises building foreign exchange reserves, taming inflation and supporting the naira currency, over lowering borrowing costs.

Standard and Poor's upgraded Nigeria's credit rating this month to BB-, three notches below investment grade, citing improved financial stability and optimism over reforms to the banking and electricity sectors.

Africa's most populous nation is still hobbled though by widespread government corruption and mismanagement.