Nigeria's oil-based economy stumbles

ABUJA, Nigeria, Aug. 31 (UPI) -- Slipping into a formal recession, the Nigerian government said the contribution of oil to economic growth slipped slightly more than 2 percent.

The government's Bureau of Statistics said the economy, measured by gross domestic product, declined 2.06 percent year-on-year, lower by 1.7 percentage points from the previous quarter and 4.4 percent lower from the same time in 2015.

"As a share of the economy, the oil sector contributed 8.26 percent to total real GDP, down from the contribution recorded in the corresponding period of 2015 and the first quarter of 2016 by 1.54 percent and 2.03 percent respectively," the bureau said in its quarterly report.

The International Monetary Fund said last month the downturn in the Nigerian economy was a primary contributor to contraction in Sub-Saharan Africa, adding the situation in Nigeria, the region's largest economy, was particularly difficult.

One key reason for the Nigerian woes, IMF economists said, was the disruption to oil operations in the Niger Delta.

Burdened already by revenue lost to lower crude oil prices, Nigeria production is the target of a campaign from militant Niger Delta Avengers, one of the more active groups of its kind in the region.

In an early August statement, NDA spokesman Mudoch Agbinibo said the group was calling for the restructuring of the country, saying President Muhammadu Buhari was deaf to the plight of his constituents.

The Nigerian Bureau of Statistics said oil production during the second quarter declined almost 20 percent from the previous period.

"As a result, real growth in the oil sector was negative 17.48 percent year-on-year in the second quarter of 2016," the bureau said.

According to an August report from the U.S. Energy Information Administration, total Nigerian crude oil production fell to a 30-year low this year.