Africa's largest economy has plunged into its second recession in less than five years, hit by the oil price crash sparked by the coronavirus pandemic.
As Nigerian crude oil production fell to a four-year low, gross domestic product shrank 3.6 percent in the three months to September, after shrinking 6.1 percent in the previous quarter, according to official figures released on Saturday.
Two consecutive quarters of economic contraction mean that Africa's largest crude oil producer has officially entered recession. It had barely begun to recover from the recession following the 2015 oil price crash.
The IMF has forecast that the Nigerian economy will contract 4.3 percent this year, which would be the largest decline in nearly 40 years.
Yvonne Mhango, economist for Africa in the sub-Saharan renaissance, said it was encouraging that the non-oil sector declined 2.5 percent year-over-year for the quarter, compared to around 6 percent in the second quarter.
"With this sector accounting for over 90 percent of the economy, it is positive that the worst of the crisis appears to have passed in the second quarter of 2020," she said.
More than half of Nigerians are unemployed or underemployed, and inflation and food prices are rising.
The central bank of Nigeria will begin its two-day monetary policy meeting on Monday after a surprising 100 basis points cut in September to bolster the economy.
The economic picture remains bad. A dollar shortage strikes the private sector, which has to import almost all of its raw materials and equipment, while oil production has fallen from 1.81 million barrels a day in the previous quarter to 1.67 million barrels a day.
Raw revenues account for nearly 90 percent of Nigerian foreign exchange and about half of government revenues, which has fallen despite the government need to increase funds for health and social services in the face of the coronavirus pandemic.
The recession resurrected memories of 2016 when critics said President Muhammadu Buhari's administration exacerbated an economic slump triggered by the oil crash through measures such as maintaining multiple exchange rates.
The central bank took further steps this year to standardize its exchange rates and devalue the naira by 20 percent, something that the World Bank, IMF and many economists had long encouraged.
The government has also used the crisis caused by the pandemic to take steps to implement a number of key reforms that have long been seen as essential to promoting sustainable growth.
These include the rapid reforms of the oil industry that have been in the works for two decades, the lowering of an expensive fuel subsidy that costs the government billions each year, the increase in VAT, and the overhaul of the electricity tariff that has made the energy sector uneconomical.