Posted: Monday 19th March 2012 at 23:40 pm

Oil shutdown disrupts Nigeria’s economic growth

The Nigerian oil sector was badly hurt by the shutdown of Bonga offshore field, Forcados pipelines among other facilities in 2011.

The unprecedented levels of disruption such as experienced at Bonga, a 200,000 barrel per day, bpd, facility, which supplies close to 10 percent of Nigeria’s total crude output, reduced the expected earnings from the oil sector.

The Statistician-General, National Bureau of Statistics, NBS, Dr. Yemi Kale said that sabotage leaks were responsible for Shell Petroleum Development Company, SPDC, declaring a force majeure on its Forcados export programme for the Q4 of 2011 due to a sabotage leak on its Trans Forcados Pipeline.

In a data publication signed by Kale, the sector benefited immensely from the high international crude oil market price and the exchange rate regime of naira against the dollar in spite of decline in daily average production, while the oil sector contributed about 14.64 per-cent to real Gross Domestic Product, GDP, in the Q4 2010, the contribution in fourth quarter of 2011 was, however, 13.54 percent.

On an aggregate basis the economy, when measured by the real GDP grew by 7.68 percent in the Q4 of 2011 as against 8.60 percent in the corresponding quarter of 2010, and that the 0.92 percentage point decrease in GDP growth observed in the Q4 of 2011 was as a result of production shut-down in the oil sector during the period.

The NBS boss said on a nominal basis, the GDP for the period in review was estimated at N10.05million against the N9.46million in the corresponding quarter of 2010, thus indicating an in-crease.

GDP grows by 7.68%

The nation’s GDP, growth rate rose marginally to 7.68 per cent during the period, up from the 7.40 per cent rate of the preceding quarter, the latest report of the country’s Real GDP rate by the NBS revealed. The rate was 7.72 per cent in the 2nd quarter of last year. This is even as poverty level has also continued to show greater depth.

However, when analysed on year-on-year basis, the 4th Quarter growth was far below the 8.60 per cent recorded in the corresponding period of 2010, a development that could be attributed to decline in oil sector productivity occasioned by series of shut-downs recorded in the upstream sector during the period under review.

According to the Revised 2010 and estimates for Q1-Q4, 2011 report released by the Bureau last Tuesday, the estimated GDP for the Q4 of 2011 was projected at N10.05million as against the N9.46million during the corresponding quarter of 2010 thus indicating an increase.

The NBS said: “On the aggregate basis the economy when measured by the Real GDP, grew by 7.68 percent in the fourth quarter of 2011 as against 8.60 per cent in the corresponding period of 2010.

“The 0.92 percentage point decrease in Real GDP growth observed in the fourth quarter of 2011 was a result of production shut down in the oil sector during the period. On a nominal basis, the GDP for the fourth quarter of 2011 was estimated at N10.05million against the N9.46million during the corresponding quarter of 2010, thus indicating an increase,” the report added.

According to the Bureau, the Q4 GDP rate still indicated that efforts by government to ensure that Nigeria becomes one of the leading 20 economies in the world by Year 2020, when measured by GDP are yielding desired results.

The agency noted that only two countries, Mongolia and China with GDP growth rate of 14.9 per cent and 8.9 per cent respectively out of the 46 countries, which released their GDP estimates for Q4 2011, grew faster than Nigeria.

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Oil shutdown disrupts Nigeria’s economic growth

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