Nigeria’s telecommunication sector has proven to be one of the biggest gainers amid the COVID-19 pandemic. The sector recorded an 18.10% growth in Q2 2020. This is according to the latest Gross Domestic Product (GDP) report released by the National Bureau of Statistics.
According to the GDP report, the telecommunication sector grew by 18.1% in real terms during the second quarter of 2020, compared to 11.34% recorded in the corresponding quarter of 2019, and 9.71% in the previous quarter (Q1 2020).
The COVID-19 induced lockdown significantly disrupted the Nigerian economy in the second quarter of 2020. However, the telecommunication sector came out resilient, driven by increased demand for data usage and growth in the number of mobile subscribers.
Nigeria’s telecom sector posts biggest growth in 6 quarters
Broadly, the Information and Communication sector is comprised of the four activities of Telecommunications and Information Services, Publishing, Motion Picture, Sound Recording, and Music Production; and Broadcasting.
Information and Communication (ICT), as a broad sector, grew by 15.1% and contributed 17.87% to the total value of real GDP (N15.9 trillion) in the quarter.
In Q2 2020, the telecommunication sector grew by 18.1% year-on-year, while it grew by 24.8% quarter-on-quarter. This is the biggest growth the telecom sector would record since Q4 2018, when the telecom sector posted a GDP growth of c.19%.
Meanwhile, the agric sector slowed, while manufacturing, trade, and others shrunk
Nigeria’s agricultural sector slowed down in Q2 2020, with a growth of 1.58% growth (year-on-year), from 1.7% in Q2 2019 and 2.2% in the previous quarter (Q1 2020).
The report showed that other critical sectors of the economy such as manufacturing, transportation, construction, accommodation and food service, education, real estate, and trade also recorded significant contractions in the quarter under review. See the indicators below:
- Nigeria’s Manufacturing sector contracted by 8.78% in Q2 2020, from -0.13% and 0.43 recorded in Q2 2019 and Q1 2020.
- Oil refining, a component of the manufacturing sector, dipped by 67.7% (year-on-year).
- Transportation and storage sector contracted in real terms by 49.23% (year-on-year).
- Accommodation and food services contracted by 40.19%.
- Construction sector shrinks by 31.8%.
- Education sector down by 24.1%.
- Other sectors with significant contractions include; Real Estate (21.99%), Trade (16.59%), Professional & Technical services (15.41%), other services (15.07%).
The Nigerian economy, during the quarter, witnessed the ripple effects of the twin shocks — weakened global oil price which led to a decline in Nigeria’s oil revenue, and the COVID-19 induced lockdown which almost grounded the economy to a standstill.
The telecom sector has remained resilient amid the COVID-19 pandemic given the surge in the demand for data usage and increase in total mobile subscribers. Due to the COVID-19 pandemic, organizations are adjusting to digital workspace, a new normal which is expected to increase data services, and further enhances growth in the sector in the short to medium term
While most sectors recorded negative growth in Q2, the trend may subsist in subsequent quarters of the year as concerns about emergence of second wave of the COVID-19 pandemic may distort the recovery trajectory of critical sectors
Senate endorses ex-Service Chiefs as Non-career Ambassadors
The Senate has confirmed President Buhari’s nomination of the immediate past service chiefs as non-career ambassadors.
The Nigerian Senate has endorsed the nomination of the past serving Military Service Chiefs as Non-career Ambassadors.
This was confirmed during Tuesday’s plenary session and announced in a social media statement by the Nigerian Senate.
Their confirmation follows the consideration of the report of the Senate Committee on Foreign Affairs, Chaired by Senator Adamu Bulkachuwa.
According to reports, the Senate Minority Leader Enyinaya Abaribe, however, questioned the nomination and confirmation of the ex-service chiefs when the Senate had on 3 different occasions called for their sack.
Senator Abaribe also raised issues on the petitions against the former service chiefs and questioned why they were dismissed without explanations.
But Senate President Ahmad Lawan dismissed Senator Abaribe’s concerns, ruling that the nomination of the former service chiefs cannot be nullified simply because the upper chamber had called for their sack, noting that this is totally a different assignment.
In his concluding statement, the Senate President, Senator Lawan added that these nominees that have just been confirmed have served this country to the best of their abilities. He appealed to the executive to make sure they use their experience as military men to the best.
“These nominees that we have just confirmed are nominees that have served this country to the best of their ability. Our appeal to the Executive is to make sure they use their experiences as military men to the best,” Lawan said.
Lawan, on behalf of the senate, wished them a very successful career in their capacity as Non-Career Ambassadors.
What you should know
- Recall Nairametrics reported earlier this month that President Muhammadu Buhari nominated ex-Service Chiefs for Senate approval as non-career Ambassadors-Designate.
- Their appointment came barely a week after their retirement as service chiefs and their replacement with new ones.
- This led to a spate of criticisms from some Nigerians who felt that the nation’s security situation got worse under their watch.
- They were reported to have tendered their resignation from their positions amid heightened calls that they should be sacked due to the increasing rate of insecurity across the country.
2020 budget performance: FG achieves 89% capital release in December 2020
The Minister of Finance has revealed that the FG achieved 89% release of the capital component of the 2020 budget to MDAs as of December 2020.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, has revealed that the Federal Government achieved 89% release of the capital component of the 2020 budget to Ministries, Departments and Agencies (MDAs) as of December 2020.
She said that the 89% capital funding for MDAs was achieved with the release of N1.74 trillion.
According to a report by the News Agency of Nigeria (NAN), this disclosure was made by Ahmed at an interactive session with the leadership of the National Assembly on Monday, February 22, 2021.
She also revealed that the government had disbursed N118.37 billion for Covid-19 capital expenditure from the fund.
What the Minister for Finance is saying
Ahmed said the Nigerian economy faced serious challenges in 2020, with the macroeconomic environment significantly disrupted by the Covid-19 pandemic.
She said this led to a 65% drop in projected net 2020 government revenues from the oil and gas sector, which adversely affected foreign exchange inflows into the economy.
On the delayed release of funds to implement the 2020 capital budget until March 31, the Minister said the complaint had decreased.
She said, “I think the complaint was earlier in the year when we were trying to transfer the balances. As far as I know, in the past three weeks, I haven’t heard any such complaints and we have been able to address them.
“But when we started the transfers, we couldn’t transfer to some agencies because of some limitations in the system, but we have since been able to transfer the capital component that is being utilised by the agencies budget to the system.”
While pointing out that the implementation of the MDAs projects was tied to procurement processes and capacity of the MDA, Ahmed also said the extension of the 2020 capital budget implementation to March 31 had recorded 30% performance as at January.
However, Ahmed said that she expected that the extension would record 100% performance in March.
Speaking during the interaction, the Senate’s Chief Whip, Senator Orji-Uzor Kalu, commended the Minister on the capital performance of the 2020 budget.
He said, “I want to commend the minister and her team because this is the first time in the history of Nigeria that by December 31, we are having 89% performance expenditure of the budget. It has never happened before; Last year was the very first.
“The budget had been going 49%, 27%; this means from what the Senate President was asking, it means by March, we should be looking at implementing the budget 100%.’’
Earlier, President of the Senate, Ahmad Lawan said the meeting was to get an update on the capital implementation of the 2020 budget given its extension for implementation by the national assembly to March 31.
What this means
- The 89% capital release for the 2020 budget as of December 2020 is quite encouraging as it occurred despite the economic challenges and disruption caused by the outbreak of the coronavirus pandemic.
- There seems to be an improved effort by the Federal Government at the budgeting process with the early passage of the 2021 budget and the implementation of the capital component of the 2020 budget.
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