Nigerian economy expands in Q1 as oil output rises

Nigeria’s economy expanded for a fourth straight quarter in the first three months of the year, boosted by an increase in oil prices and output.

Gross domestic product expanded 1.95 percent in the three months through March from a year earlier, Abuja-based National Bureau of Statistics said in an emailed report Monday. That lags the 2.6 percent median estimate in a Bloomberg survey.

While it accounts for only about 10 percent of GDP, oil generates the bulk of government revenue for Nigeria, the continent’s largest producer. Output rose to 2 million barrels a day in the quarter, the most since the first quarter of 2016, according to the statistics bureau.

The growth surge shows the West African economy, which vies with South Africa to be the continent’s largest, is gaining momentum after its 2016 contraction. A record 2018 budget that lawmakers approved last week will also support this. President Muhammadu Buhari still has to sign off the spending plans.

The faster expansion reduces pressure on the central bank to cut its key rate from the record 14 percent where it’s been since July 2016. Governor Godwin Emefiele will announce the Monetary Policy Committee’s decision on Tuesday and all but four of the 15 economists in a Bloomberg survey said the panel will keep borrowing costs unchanged.

The IMF forecasts growth will accelerate to 2.1 percent this year from 0.8 percent in 2017.