Nigeria economy contracts first time in 12 years
​Nigeria’s economy contracted for the first time since 2004 with real GDP in Q1’16 down by 0.36% (Q1’15: +3.96%). Real GDP growth came within the neighbourhood of our -0.41% estimate compared to Bloomberg Consensus of 1.85%. Of the myriad of output challenges facing the Nigerian economy, we think the biggest hit to growth must have come from capital controls. Non-oil sector real GDP declined 0.18% with the biggest drags coming from Manufacturing, Financial Institutions and Real Estate. Oil sector GDP slowed by 1.89% y/y driven by slightly lower oil production of 2.11 million barrels per day (mbpd) compared to 2.18 mpbd recorded in Q1’15. We had expected to see larger contraction in oil production given that, the Forcados pipeline which exports c.250,000 bpd was shut-in for half of the quarter (starting mid-February). Nigeria’s growth is being stifled by macroeconomic headwinds that have rattled the country since the start of the oil price decline.
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