National Bureau of Statistics has said that Nigeria’s Gross Domestic Product (GDP) grew by 0.51%(year-on-year) in real terms in the first quarter of 2021, marking two consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020. The Q1 2021 growth rate was slower than the 1.87 per cent growth rate recorded in Q1 2020 but higher than 0.11% recorded in Q4 2020, indicative of a slow but continuous recovery. Nevertheless, quarter on quarter, real GDP grew at -13.93% in Q1 2021 compared to Q4 2020, reflecting a generally slower pace of economic activities at the start of the year.
In the quarter under review, aggregate GDP stood at N40,014,482.74 million in nominal terms. This performance is higher when compared to the first quarter of 2020 which recorded aggregate GDP of N35,647,406.08 million, indicating a year on year nominal growth rate of 12.25%. The nominal GDP growth rate in Q1 2021 was higher relative to 12.01% growth recorded in the first quarter of 2020 as well as the 10.07% growth recorded in the preceding quarter. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors. In the first quarter of 2021, average daily oil production stood at 1.72 million barrels per day (mbpd), or 0.35 mbpd lower than the average daily production of 2.07 mbpd recorded in the same quarter of 2020 but higher than the production volume of 1.56 mbpd recorded in the fourth quarter of 2020.
According to NBS “The oil sector recorded real GDP growth rate of –2.21% (year-on-year) in Q1 2021 indicating a decrease of –7.27% points relative to the growth rate recorded in the corresponding quarter of 2020 (5.06%). Compared to Q4 2020 which recorded –19.76% growth rate, growth in Q1 2021 was higher by 17.55% points. Quarter-on-quarter, the oil sector recorded a growth rate of 35.65% in Q12021. In terms of contribution to aggregate GDP, the Oil sector accounted for 9.25% of aggregate real GDP in Q1 2021, slightly lower than 9.5% recorded in the corresponding period of 2020 but higher than in the preceding quarter, where it contributed 5.87%.
Reacting to the NBS data on the economy Lagos Chamber of Commerce and Industry (LCCI) said that the recently released Q1 GDP data was a “pleasant surprise” for most manufacturers, though foreign exchange dependent manufacturing sectors have not had a good experience over the past year. Dr Muda Yusuf, Director-General, LCCI, in a statement on after the NBS produced Nigeria’s Q1 GDP data. The report showed that the manufacturing sector grew by 3.4%, indicating the first expansion in the past three quarters. The LCCI boss stated that the manufacturing sector’s recovery was unexpected, due to FX liquidity issues faced by most manufacturers over the past 12 months. “Evidently, the economy is still struggling to recover from the shocks of the pandemic, and related slip into recession,” Yusuf said.
“However, the first-quarter GDP data contained a few pleasant surprises. The agricultural sector expanded by 2.28% despite the ravaging effects of insecurity, farmers/herders clashes, and the displacement of many farming communities. Most foreign exchange dependent manufacturing sectors have not had a good experience over the past one year. Admittedly, segments of manufacturing with high levels of backward integration had lesser degrees of shocks from the forex illiquidity and exchange rate depreciation in the economy.” Yusuf stated that the growth of 6.31% recorded in the ICT sector was expected, given the opportunities created for ICT in the new normal, and that the cost-reflective tariff appeared to have impacted positively on the electricity sector, which recorded 8.66%. The LCCI boss added that the continued contraction of the trade sector was worrisome as the sector was dealing with issues arising from exchange rate depreciation and forex illiquidity, high inflationary pressures, and weak purchasing power.
“Yet the sector is one of the biggest sources of employment, especially in the self-employment space. It is equally worrisome that the transportation sector experienced the worst contraction at 21.9 percent in the first quarter of 2021. This may be as a result of the growing insecurity on our roads, and this goes to demonstrate the multidimensional impact of insecurity on the economy. The hospitality and entertainment sectors have been in recession for over a year and the government needs to do a lot more to salvage the sector from complete collapse,” he urged. Nigeria’s GDP grew by 0.51% (year-on-year) in real terms in the first quarter of 2021. This is slower than the 1.87% growth recorded in the corresponding quarter of 2020, but higher than 0.11% recorded in the previous quarter (Q4 2020).
