Home Business Nigeria’s GDP dodges shrinkage to expand by 0.11%

Nigeria’s GDP dodges shrinkage to expand by 0.11%

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Nigeria’s oil sector still lags. Major international oil companies that operate a major share of Africa’s daily oil and gas production are currently unable to operate fully and safely because of such travel restrictions: Source: African Energy Chamber

By Charles Ike-Okoh

THUR 18 FEB, 2021-theGBJournal- Nigeria’s economy surprisingly expanded by 0.11% (year-on-year) in real terms in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters.

However, for 2020FY, real GDP contracted by 1.92% (2019FY: +2.27%), according to the latest Gross Domestic Product (GDP) Report published today by the National Bureau of Statistics (NBS).

The NBS notes that the positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters.

The Q4 2020 growth rate was lower than growth rate recorded the previous year by –2.44% points, but higher by 3.74% points compared to Q3 2020.

On a quarter on quarter basis, real GDP growth was 9.68% indicating a second positive consecutive quarter on quarter real growth rate in 2020 after two negative quarters.

Overall, in 2020, the annual growth of real GDP was estimated at –1.92%, a decline of –4.20% points when compared to the 2.27% recorded in 2019.

Aggregate GDP stood at N43,564,006.29 million in nominal terms in the quarter under review, higher when compared to the fourth quarter of 2019 which recorded a GDP aggregate of N39,577,340.04 million, representing a year on year nominal growth rate of 10.07%.

This growth rate was however lower relative to growth recorded in the fourth quarter of 2019 by –2.26% points but higher than the preceding quarter by 6.68% points with growth rates recorded at 12.34% and 3.39% respectively.

The GDP figures’ breakdown showed that Nigeria’s oil sector still lags, contracting by 19.76% y/y (compared to growth of 6.36% y/y in Q4-19).

According to NBS, crude oil production averaged 1.56mb/d in Q4-20, 22.0% y/y lower than Q4-19. The oil sector contributed 5.87% to total GDP (vs 7.32% Q4-19) during the review period.

Similarly, the non-oil sector grew slower by 1.69% y/y in Q4-20 (vs 2.26% in Q4-19). The non-oil sector contributed 94.13% to total GDP (vs 92.68% and 91.30% in Q4-19 and Q3-20, respectively).

Analysing the breakdown of three of the most significant components of the GDP: Agriculture grew stronger by 3.42% y/y (vs 1.39% y/y in Q3-20); Industries contracted by 7.30% y/y, (vs -6.12% y/y in Q3-20); while Services grew by 1.39% (vs -5.49% y/y in Q3-20).

In terms of contribution, services, agriculture, and industries, respectively, accounted for 54.28%, 26.95%, and 18.77% of overall output growth.

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