But Minister of Budget and National Planning, Udoma, in a statement by his media adviser, Mr. James Akpandem, said it was evident that the implementation of the targeted policies and programmes of the Economic Recovery and Growth Plan (ERGP) were yielding positive results.
The minister said he was happy to see that the Nigerian economy had continued to register positive growth in the first and second quarters of the year in spite of the security and other challenges faced by the country.
He emphasised that the focus of the ERGP is on diversifying the economy away from dependence on the oil and gas sector and was encouraged that efforts are yielding fruits by the continuing growth in the non-oil sector.
The minister noted that this 2.05 per cent growth in the non-oil sector represents the strongest growth in the non-oil GDP since the fourth quarter of 2015.
However, the minister decried the fact that there was a slight drop in real GDP growth rate for the second quarter principally as a result of the contraction in the oil sector.
“The oil and gas sector contracted by -3.95 per cent in the second quarter of 2018 compared to a growth rate of 14.77 per cent recorded in the first quarter of 2018 and 3.53 per cent in the corresponding period in 2017,” Udoma stated.
However, the minister noted that the contraction in the crude oil and gas sectors was attributable to some production issues which are being addressed by the Nigerian National Petroleum Corporation (NNPC).
The minister added: “For instance, average crude oil production was only 1.84 million barrels a day in Q2 2018 as opposed to an average production of two million barrels a day in Q1 2018.”
He was optimistic that once these issues are addressed, the nation should be able to, once more, achieve positive growth in the oil and gas sector, emphasising that the Nigerian economy needs growth from both the oil, as well as the non-oil sectors, to achieve its ERGP growth targets.
“Another area of concern for government was the slightly weaker growth in the agriculture sector which slowed to 1.19 per cent in the second quarter in 2018 compared to three per cent in the first quarter of 2018.This is partly attributable to security challenges mainly in the North-east and North-central zones,” he explained.
He further stated that the security challenge affected activities of farmers with the resultant impact on commodity output, indicating that the various measures being taken by government to tackle the situation is already reducing incidents of violent conflicts and other disruptions to farming activity.
The minister said he expected to see a rebound in growth in the agriculture sector in subsequent quarters, adding that he was also pleased to see that industry has continued to maintain a positive growth rate as a result of the performance of manufacturing and solid minerals which retained positive growth of 0.68 per cent and 5.24 per cent respectively in the second quarter of 2018.
“The total value of capital importation into Nigeria stood at $ 5.5 billion in the second quarter of 2018, representing a 207.62 per cent increase compared to the second quarter of 2017,” he said.
While capital importation declined slightly in the second quarter of 2018, the total for the first half of 2018 at $11.8 billion represented the highest half year capital importation since 2014, indicating increasing confidence in the Nigerian economy, he pointed out.
He was optimistic that as the federal government intensifies its activities in the implementation of the ERGP, the economy would sustain the growth momentum.