The Applicability of Principal Component Analysis: A Review of the Nigeria Gross Domestic Products (GDP)

Abstract

In 2014, Nigeria was largest and fastest growing economy in Africa, and this is determine by year on year Gross Domestic Product (GDP), which is the major tools use by the rest of the world to determine the capacity of a country. Furthermore National Bureau of Statistics (NBS) releases both quarterly and yearly growth of Nigeria GDP, while the data source in this project is from NBS, starting from 1980 to 2017. Moreover the Nigeria GDP comprises many components. The major PCs use are Agriculture, Building and Construction, Industry, Wholesale and Retail Trade, and Services. It was observed that there is yearly growth in Nigeria gross domestic products due to increase in all contributors factored components from 1980 to 2017, Agriculture had the highest number activities to this per capital income followed by Industry, Services, wholesale and retail trade, and building and construction. Also the overall accumulated variance for the GDP for the studied period is 10.7 for a 56% coefficient of variation. All the contributors (Agriculture, Industry,......) maintained a positive correlation all through the period of study expect for Services that affect/shirk the GDP along the year. Wholesales experienced the strongest doling of taking care of the GDP with 98%, followed by Building and Construction, industry and agriculture with 86%, 78% and 6% respectively. However for Nigeria to maintain the largest economy in Africa It will strongly advice that the economy team should look properly on agriculture and industry and if this two increases certainly wholesale and retail trade with building and construction will be affected positively while extended to services, therefore the GDP will also be stabilise.