LAGOS, AUGUST 31, 2016 – Nigeria, Africa’s biggest economy, officially slid into recession for the first time in more than 20 years as the statistics office announced a further contraction in the second quarter of the year.The Nigerian Bureau of Statistics (NBS) said on Wednesday that gross domestic product (GDP) contracted by 2.06 percent after shrinking 0.36 in the first quarter.
It said the non-oil sector declined due to a weaker currency, while lower prices dragged the oil sector down.
A slump in crude prices, Nigeria’s mainstay, has hammered public finances and the naira currency, causing chronic dollar shortages. Crude sales account for around 70 percent of government revenues.
Compounding the impact of low oil prices, attacks by militants on oil and gas facilities in the southern Niger Delta hub since the start of the year has cut crude production by about 700,000 barrels per day (bpd) to 1.56 million bpd. The government’s 2016 budget assumed 2.2 million bpd.
On Wednesday, the statistics office said annual inflation reached 17.1 percent in July from 16.5 percent in June – a more than 10-year high – and food inflation rose to 15.8 percent from 15.3.
Nigeria’s sovereign dollar bonds fell across the curve to their lowest value in more than two weeks after the NBS released its data.
