Nigeria’s GDP rises 0.51% in Q1 2021

Nigeria’s Gross Domestic Product (GDP) increased by 0.51 per cent in the first quarter of 2021, according to a report released by the National Bureau of Statistics (NBS) yesterday.

This is an improvement over the 0.11 per cent  increase recorded in the fourth quarter (Q4) of 2020.

With the latest figure, Nigeria has recorded its second consecutive quarter growth since the economy fell into recession in 2020.

“Nigeria’s Gross Domestic Product (GDP) grew by 0.51 per cent (year-on-year) in real terms in the first quarter (Q1) of 2021, marking two consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020,” the report states.

“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 per cent 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 per cent.

“The nominal GDP growth rate in Q1 2021 was higher relative to 12.01 per cent growth recorded in the first quarter of 2020, as well as the 10.07 per cent growth recorded in the preceding quarter.”

According to the report, the oil sector recorded real GDP growth rate of –2.21 per cent (year-on-year) in Q1 2021, indicating a decrease of -7.27 percentage points relative to the growth rate recorded in the corresponding quarter of 2020.

It is also higher when compared to Q4 2020 which recorded a –19.76 per cent growth rate — growth in Q1 2021 was higher by 17.55 percentage points.

Daily oil production stood at 1.72 million barrels per day (mbpd), or 0.35mbpd lower than the average daily production of 2.07mbpd recorded in the same quarter of 2020.

However, the figure was higher than the production volume of 1.56mbpd recorded in the fourth quarter of 2020.

Meanwhile, performance in the non-oil sector declined when compared to previous figures.

“The non-oil sector grew by 0.79 per cent in real terms in Q1 2021, which was -0.75 per cent points lower compared to the rate recorded in the same quarter of 2020, and -0.89 per cent points lower than rates recorded in the fourth quarter of 2020,” it reads.

“Growth in the non-oil sector was driven mainly by the Information and Communication (Telecommunication) sector, while other drivers include Agriculture (Crop Production); Manufacturing (Food, Beverage & Tobacco); Real Estate; Construction and Human Health & Social Services.”

Reacting to the NBS data yesterday, the Lagos Chamber of Commerce and Industry (LCCI), said it was pleasantly surprised at the marginal GDP growth in the first quarter of 2021 amid widespread insecurity and effect of COVID-19 pandemic “We note the marginal improvement in real GDP growth from 0.11per cent in the fourth quarter of 2020 to 0.51 per cent in the first quarter of 2021. Its Director-General, Dr Muda Yusuf said “Evidently, the economy is still struggling to recover from the shocks of the pandemic and related slip into recession.

The GDP data contained few pleasant surprises.  The agricultural sector expanded by 2.28 per cent despite the ravaging effects of insecurity, farmers-herders clashes and the displacement of many farming communities.  The recovery of manufacturing from a negative growth territory in Q4 2020 to a positive growth level of 3.4 per cent in Q1 2021 was also a pleasant surprise.  The sector has been grappling with unprecedented foreign exchange illiquidity over the past few months.  This is coupled with the structural,  policy, institutional and macroeconomic challenges. The data does not reflect the reality with most manufacturers.

Also reacting, the Nigeria Employers Consultative Association (NECA) noted that though the country’s Gross Domestic Product (GDP) grew by 0.51% (year-on-year) in real terms, signalling a positive growth trajectory from Q4, 2020 growth pattern of 0.11 per cent, it was lower than what the economy recorded in the same period of 2020. 

The Director-General of NECA, Timothy Olawale said, “While we applaud the positive trend, nevertheless, it is not yet a time for celebration, as the rate is still far below the population growth rate of over 3 per cent per annum."