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ECONOMIC CRISIS: Nigeria's GDP Contracted 2.06 pct in Q2

ECONOMIC CRISIS: Nigeria's GDP Contracted 2.06 pct in Q2

Low petroleum prices, foreign currency shortages and attacks by oil militants have contributed to creating the retrograde economy.

Gross domestic product in Africa's most populous country contracted by 2.1 percent in the three months through June from a year earlier, the Abuja-based National Bureau of Statistics said in an e-mailed statement on Wednesday, after shrinking 0.4 percent in the first quarter.

"Besides the growth recorded in the agriculture and solid mineral sectors, the Nigerian economy, in response to the policies of the Buhari Presidency, is also doing better than what the International Monetary Fund had estimated with clear indications that the second half of the year would be even much better", he stated.

Therefore, the results of second quarter of 2016 GDP growth rate has placed Nigeria in recession from a professional point of view.

Political pressure on the president is now likely to increase, following news of the country's first official recession in more than two decades.

"We have long warned of a slow-burning crisis in Nigeria".

Nigeria is the continent's largest producer of oil, producing approximately 2.4 million barrels per day.

"More important than the headline number is the fact that nearly all key sectors of the economy are now struggling", said John Ashbourne, Africa economist at London-based Capital Economics.

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However, economists appeared unworried by the stagnation in Norway, pointing to an expected recovery in Brent oil prices which they believed would eventually stimulate Norway's economy. Most notably, the group attacked a Chevron offshore facility in May and the underwater Forcados export pipeline operated by Shell in late March.

Growth in non-oil sectors of the country's economy has also been badly hit, as Business Insider's Elena Holodny wrote in May, with manufacturing taking the biggest hit.

"Agriculture grew by 4.53% in the second quarter of 2016 as compared with 3.09% in the first quarter".

Mainland GDP on the other hand expanded by 0.4% (consensus: 0.3%). But that decision has reduced the flow of raw materials to the country's manufacturers.

Reacting to a spike in inflation and growing discontentment, Buhari's government finally devalued the naira in June.

An economic adviser to President Muhammadu Buhari, Adeyemi Dipeolu, says the bleak data is "mostly due to a sharp contraction in the oil sector due to huge losses of crude oil production" resulting from vandalism and "sabotage".

According to critics, government policies as well made a bad situation even worse.

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