(Bloomberg) — Nigeria’s recovery from last year’s economic slump slowed in the third quarter, providing the central bank with another reason to leave interest rates unchanged next week.
Gross domestic product expanded 4% in the three months through September from a year earlier, compared with 5% in the second quarter, Statistician-General Simon Harry told reporters in Abuja, the capital, on Thursday.
Added to slowing inflation, Thursday’s data may convince the central bank to maintain its benchmark rate at 11.5% on Nov. 23. Policy makers have left the gauge unchanged for six consecutive meetings to build growth momentum in Africa’s largest economy.
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The slower pace of recovery was driven by a fall in crude production by 6% in the third quarter to 1.57 million barrels per day, compared with a year earlier, resulting in a 10.7% contraction in the oil sector.
Africa’s top crude producer has been battling to ramp up production to reach its full OPEC+ quota due to ongoing supply disruptions.
Crude contributes just over 7% to Nigeria’s GDP and accounts for about 90% of foreign-exchange earnings and half of government revenue.
The non-oil economy expanded by 5.4% from a year earlier, largely driven by the trade and telecommunication industries. That compares with 6.7% growth in the second quarter.
Nigeria’s government expects the economy to expand 2.5% this year, after contracting 1.92% last year. The Finance Ministry announced plans last month to increase spending and borrowing to help accelerate growth.
In a communique after its last MPC meeting in September, Governor Godwin Emefiele said the central bank’s medium-term goal is to fast-track growth rates above historical levels. Economic output has lagged the pace of population expansion of about 2.6% every year since oil prices fell in 2015, while inflation that peaked in March has exceeded the 9% ceiling of the bank’s target band for more than six years.
(Updates from fourth paragraph with crude production figures.)
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