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Nigeria’s economy exits recession with 0.11% growth

NBS: Agriculture, mining, others are major drivers
LCCI, APC, others excited over recovery

After three consecutive declines on Gross Domestic Product (GDP), Nigeria’s economy exited recession with subdued 0.11 per cent growth (year-on-year in real terms) in the fourth quarter of 2020. The National Bureau of Statistics (NBS), in the Nigerian Gross Domestic Product (GDP) Report (Q4 and Full Year 2020) released yesterday in Abuja, said this represented first positive quarterly growth in the last three quarters.

The country’s GDP grew by 0.11 per cent in Q4 2020 from the 6.11 per cent contraction in Q3, signalling a gradual recovery from rewithcession. In real terms, the fourth quarter real GDP translates to N19.55 trillion and a normal GDP value of N43.56 trillion.

The report cited agriculture, which grew by 3.42 percent (year-on-year) in real terms, an increase of 1.11 per cent points from the corresponding period of 2019, and an increase of 2.03 per cent points from the preceding quarter as the major economic driver. Describing the growth, NBS said the positive growth reflected the gradual return of economic activities following the easing of movement restriction and limited local and international commercial activities in the preceding quarters.

It noted that while the Q4’20 growth rate was lower than growth rate recorded the previous year by –2.44 per cent points, it was higher by 3.74 per cent points compared to Q3’20. “On a quarter-on-quarter basis, real GDP growth was 9.68 per cent, 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 percent, a decline of –4.20 per cent points when compared to the 2.27 per cent recorded in 2019. In the quarter under review, aggregate GDP stood at N43.56 million in nominal terms. “This performance is higher when compared to the fourth quarter of 2019, which recorded a GDP aggregate of N39.577 billion, representing a year-on-year nominal growth rate of 10.07 per cent.

This growth rate was lower relative to growth recorded in the fourth quarter of 2019 by –2.26 per cent points, but higher than the preceding quarter by 6.68 per cent points with growth rates recorded at 12.34 per cent and 3.39 per cent respectively. “For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors,” it said. Analysed sector by sector, oil sector recorded an average daily oil production of 1.56 million barrels per day (mbpd) fourth quarter, 2020. The figure, according to NBS, was lower than the daily average production of 2.00mbpd recorded in the same quarter of 2019 by -0.44mbpd and the third quarter of 2020 by –0.11mbpd.

“Real growth of the oil sector was –19.76 per cent (year-on-year) in Q4’20, indicating a decrease by –26.12 per cent points relative to the rate recorded in the corresponding quarter of 2019. “Growth decreased by –5.87 per cent points when compared to Q3’20. Quarteron- quarter, the oil sector recorded a growth rate of –26.27 per cent in Q4’20. “For 2020, the oil sector grew at –8.89 per cent compared to 4.59 per cent in 2019. The oil sector contributed 5.87 per cent to total real GDP in Q4’20, down from the corresponding period of 2019 and the preceding quarter, where it contributed 7.32 per cent and 8.73 per cent respectively,” NBS noted.

The non-oil sector grew by 1.69 per cent in real terms in Q4’20, slower than the 2.26 per cent recorded in the corresponding quarter of 2019, but better than the –2.51 per cent growth rate recorded in the preceding quarter. For the full year of 2020, however, the non-oil sector grew –1.25 per cent compared to 2.06 per cent in 2019. Growth in the sector was driven by information and communication (telecommunications & broadcasting). Other drivers were agriculture (Crop Production), real estate, manufacturing (food, beverage & tobacco), mining and quarrying (quarrying and other minerals), and construction, accounting for positive GDP.

“In real terms, the nonoil sector contributed 94.13 per cent to the nation’s GDP in the fourth quarter of 2020, higher than the share recorded in the fourth quarter of 2019 (92.68%) and the third quarter of 2020 (91.27%). “For 2020, the non-oil sector contributed 91.84 per cent to real GDP, higher than 91.22 per cent recorded in 2019,” NBS said.

For the manufacturing sector, it recorded –1.51 per cent (year-on-year) in the fourth quarter of 2020. The figure lower than the same quarter of 2019 and the preceding quarter by –2.75 per cent points and –0.01 per cent points respectively. “Growth rate of the sector, on a quarter-on-quarter basis, stood at 5.60 per cent. For 2020, sector growth was –2.75 per cent. Real contribution to GDP in the fourth quarter of 2020 was 8.60 per cent, lower than the 8.74 per cent recorded in the fourth quarter of 2019 and the 8.93 per cent recorded in third quarter 2020. “Nevertheless, annual contribution stood at 8.99% in 2020,” the report said.

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