· Oil Refining, Metal Ores, Rail Transportation Make List
· How FOREX Scarcity, Weak Consumer Purchasing Power Affected Trade, Manufacturing Sectors
A few days ago, the National Bureau of Statistics (NBS) released the Second Quarters Gross Domestic Products (GDP) result and against all odds, the Nigerian economy grew by 3.54 percent in the second quarter of 2022.
Growth in the three-month period marked the seventh consecutive quarterly expansion. It was driven by a 4.8% improvement in the non-oil sector, which makes up most of the economy, compared with a 6.1% increase from a year earlier.
The oil sector shrunk by 12% as oil production declined to 1.43 million barrels per day in the second quarter, compared with 1.49 million barrels in the previous three-month period, Adeniran said. Nigeria has been unable to meet its OPEC+ quota this year, partly because of crude theft.
“This growth rate declined from 5.01 percent in the second quarter of 2021 when rapid growth was recorded following the toll the COVID-19 pandemic exacted on the economy in Q2 2020. In addition, the recent rising prices have adversely impacted on the second quarter of 2022 performance,” the NBS said in a report.
While the growth was against all odds, some sectors in the economy did not contribute to the growth recorded. The Matrix in this report relying on data from BusinessDay presents some worst-performing sectors:
The oil refining sector contracted by -42.12 percent in the second quarter of 2022, compared with a contraction of -46.78 percent in the same period last year.
The sector also recorded a contraction of -44.26 percent in the first quarter of 2022.
Rail Transport And Pipelines
The rail transport and pipelines sector contracted -37.90 percent in the second quarter of 2022, compared with a growth of 53.28 percent in the second quarter of 2021.
The sector recorded a growth of 124.54 percent in the first quarter of 2022.
Metal ores contracted by -25.48 percent in the second quarter of 2022, compared with a growth of 21.12 percent in the same period last year. The sector recorded a growth of 30.76 percent in the first quarter of this year.
Crude Petroleum And Natural Gas
Crude petroleum and natural gas contracted by -11.77 in the second quarter of 2022, compared with -12.65 in the same period last year. The sector shrank by -26.04 percent in the first quarter of 2022.
Electricity, Gas, Steam And Air Conditioning Supply
Electricity, gas, steam, and air conditioning supply contracted by -11.48 percent in the second quarter of 2022, compared with a growth of 78.16 percent in the same period last year. The sector contracted -11.20 percent in the first quarter of 2022.
Speaking on the sectors that contracted, analysts at Financial Derivatives Company disclosed that these are sectors that are labour intensive and that are capable of employing a large number of workers.
“Some of the sectors that contracted are the ones that are labour-intensive. Rail transportation suffered partly from the Kaduna-Abuja train attack” FDC disclosed.
Speaking further, FDC pinpointed that the slowing sectors (sectors that grew at a slower pace) are highly job-elastic and account for over 70 percent of the workforce.
“The aviation sector growth declined significantly due to increase in the price of aviation fuel and forex scarcity. Agric sector growth was largely affected by the planting season, while trade and manufacturing activities were affected by forex scarcity and weak consumer purchasing power,” they added.