Real GDP contracts 1.5% y/y in 2016
Despite headwinds, Nigeria's nominal GDP breached the
NGN100trillion mark for the first time ever in 2016. This means in
dollar terms, the economy retains its position as the largest
economy in Africa, with GDP at USD337billion. In real terms
however, the narrative is not as compelling. The economy recorded a
contraction in growth by 1.5% y/y - the result of a mix of factors:
foreign exchange and fuel shortages, intermittent power outages,
delayed fiscal stimulus and lack of clarity on the policy
environment. This performance was largely in line with our
expectations. PwC had estimated real GDP growth at -1.7% y/y.
While the non-oil sector remained the major driver of the
economy (91.6% of GDP), its resilience was called into question by
a myriad of structural shocks. Real growth in the sector was -0.2%
y/y for the first time in recent years, well below the 5-year
average of 5.1%. As expected, the oil sector contracted sharply
