Nigeria exits recession with weak economic growth

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Nigeria exits recession with weak economic growth

Nigeria has exited recession as the country’s Gross Domestic product (GDP) grew by a weak 0.11 per cent in the fourth quarter of 2020.

The latest economic expansion represents the first positive quarterly growth in the last three quarters.

The GDP report the National Bureau of Statistics (NBS) released on Thursday showed that while the fourth quarter of 2020 growth rate is lower than growth rate recorded in the previous year by –2.44 per cent points, it is higher by 3.74 per cent points compared to the third quarter of 2020.

Analysis of the report showed that 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.

“Though weak, 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,” NBS said.

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The report showed that overall in 2020, the annual growth of real GDP was estimated at –1.92 per cent, a decline of –4.20 per cent points when compared to the 2.27 per cent recorded in 2019.

The GDP numbers showed that in the quarter under review, aggregate GDP stood at N43.56 trillion in nominal terms. This performance is higher when compared to the fourth quarter of 2019 which recorded a GDP aggregate of N39.58 trillion, 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.

Meanwhile, in the fourth quarter of 2020, an average daily oil production of 1.56 million barrels per day (mbpd) was recorded. This was lower than the daily average production of 2mbpd recorded in the same quarter of 2019 by 0.44mbpd and the third quarter of 2020 by 0.11mbpd.

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Real growth of the oil sector was –19.76 percent (year-on-year) in Q4 2020 indicating a decrease by 26.12 percent points relative to the rate recorded in the corresponding quarter of 2019.

For 2020, the oil sector grew at –8.89 per cent compared to 4.59 per cent in 2019. The sector contributed 5.87 per cent to total real GDP in Q4 2020, 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 reported that the non-oil sector grew by 1.69 per cent in real terms in Q4 2020, 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.

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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 and broadcasting). Other drivers were agriculture (crop production), real estate, manufacturing (food, beverage and tobacco), mining and quarrying (quarrying and other minerals), and construction, accounting for positive GDP,” NBS said.

In real terms, the non-oil 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 per cent) and the third quarter of 2020 (91.27 per cent). For 2020, the sector contributed 91.84 per cent to real GDP, higher than 91.22 per cent recorded in 2019.

Sourced from Ships and Ports