Great Lockdown Necessitates Further Downgrade to GDP
In our first assessment of the impact of Covid-19 on economic growth (Published 16 March, see report: Economic and Price Stability – Clouds Gathering, Downpour in Sight?) we had assumed that the pandemic will be contained without risk of government implementing measures that will severely restrict economic activity for a sustained period of time (at the time, reported cases in Nigeria were just 3). We have decanted our assumption of in-built resilience, revised downward our GDP growth forecasts and present our new base case, which is for a contraction in economic activities. By our estimate, GDP grew by 1.6% YoY over the first quarter of 2020 compared to our estimate of 1.8% YoY last month. The downgrade to growth in the first quarter emanated from the disruption in supply chains – which we believe affected both manufacturing and trade activities, especially in the last month of the quarter – and downward revision of Q1 oil production average to 2.0mbpd (+1.16% YoY) from 2.1mbpd (+4.35 YoY).
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