Nigeria’s Gross Domestic Product (GDP) grew by 0.11% (year-on-year) in real terms in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters.
This is contained in the Nigerian Gross Domestic Product report, published by the National Bureau of Statistics (NBS).
According to the report, the growth was largely driven by positive growth recorded in the information and communication sector (15.9%) and agriculture (3.42%).
- The oil sector plunged by 19.76% (year-on-year) in real terms as against a contraction of 13.89% recorded in Q3 2020.
- The non-oil sector on the other hand grew by 1.69% in real terms, an improvement compared to the contraction of 2.51% recorded in Q3 2020. It however was slower than 2.26% recorded in the corresponding period of 2019.
- The service sector contributed 54.28% to the GDP in Q4 2020, followed by agriculture, which contributed 26.95%, and industries with 18.77%.
- Non-oil accounted for 94.13% while the oil sector accounted for 5.87% of the total GDP for Q4 2020.
The oil sector contracted by 19.76% (year-on-year) in Q4 2020, a downturn compared to a similar contraction of 13.89% recorded in the previous quarter (Q3 2020).
- It also represents a decline of 26.12% points when compared to a positive growth of 6.36% recorded in the corresponding period of 2019.
- The sector’s contribution to Nigeria’s GDP also reduced to 5.87% in Q4 2020 from 8.73% recorded in Q3 2020 and 7.32% in Q4 2019.
- In Q4 2020, average daily oil production of 1.56 million barrels per day (mbpd) was recorded, representing a 6.59% and 22% declines when compared to 1.67mbpd and 2mbpd recorded in Q3 2020 and Q4 2019 respectively.
- The decline in the oil sector activity can be attributed to the crash in global crude oil prices, which was triggered by the oil price war between Saudi Arabia and Russia.
The non-oil sector grew by 1.69% in real terms in Q4 2020, slower than the 2.26% recorded in the corresponding quarter of 2019, but better than the 2.51% negative growth rate recorded in the preceding quarter.
- Growth in the sector was largely 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.
- In real terms, the Non-Oil sector contributed 94.13% 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%).
Key sectors’ performance
- The agricultural sector, in the fourth quarter of 2020, grew by 3.42% (year-on-year) in real terms, an increase by 1.11% points from the corresponding period of 2019, and an increase of 2.03% points from the preceding quarter which recorded a growth rate of 1.39%.
- The sector also contributed 26.95% to the overall GDP in real terms in Q4 2020, higher than the contribution in Q4 2019 but lower than Q3 2020 which stood at 26.09% and 30.77% respectively.
- Real GDP growth in the manufacturing sector in the quarter under review stood at –1.51% (year on year), lower than the corresponding period of 2019 and the preceding quarter by 2.75% points and 0.01% points respectively.
- The real contribution to GDP in Q4 2020 was 8.60%, lower than the 8.74% recorded in the fourth quarter of 2019 and 8.93% recorded in Q3 2020.
- In real terms, the Trade sector contracted by 3.2% (year-on-year) in the fourth quarter of 2020, which was 2.62% points lower than the rate recorded in Q4 2019, and 8.92% points higher than in the preceding quarter.
- Trade’s contribution to GDP was 15.46%, which is lower than the 15.99% it represented in the corresponding period of 2019, but higher than the 13.88% recorded in the previous quarter.
- Information and communication recorded a growth rate of 14.95% in real terms, an increase of 6.45% points over the corresponding period of 2019.
- The sector contributed 15.06% to aggregate real GDP in Q4 2020, higher than the same quarter of the previous year in which it represented 13.12% and higher than the preceding quarter, in which it represented 13.47%.
What this means
The positive growth in real GDP indicates that the Nigerian economy has recovered from the pandemic-induced recession which disrupted economic activities in most part of 2020. The country will look to post capitalise on this to boost the economy further in subsequent quarters.
The moment Emefiele predicted Nigeria will be out of recession in Q4 2020
The CBN Governor had expressed optimism last year that the country was going to come out of recession in Q4 of 2020.
It is no longer news that Nigeria, Africa’s largest economy, against all expectations exited recession as its Gross Domestic Product (GDP) grew by 0.11% in the last quarter of 2020 (year on year).
However, the Governor of the Central Bank of Nigeria, Godwin Emefiele, had expressed optimism last year that the country was going to come out of recession in the fourth quarter of 2020.
According to the report released by the National Bureau of Statistics (NBS), this is the first positive quarterly growth in the last 3 quarters following growth in telecommunications and agriculture which seem to make up for the sharp drop in oil prices and production.
The surprising rebound of the Nigerian economy is coming against the prediction of the country’s Minister for Finance, Budget and National Planning, Zainab Ahmed, who while speaking at the 26th Nigerian Economic Summit, said that Nigeria is expected to exit recession by the first quarter of 2021.
The CBN Governor had during the November 2020 Monetary Policy Committee meeting, predicted that the country was going to come out of recession by the fourth quarter of 2020.
This as he said that many analysts expressed doubts about that and were waiting to prove him wrong.
In a video during a press conference as seen by Nairametrics, Emefiele said, “You said that in November MPC, I was cautiously optimistic that fourth-quarter GDP will be positive thereby taking Nigeria out of a recession that I was aggressively optimistic that during the first quarter, we will exit recession. I am praying very seriously that my prayer should be heard because I know that people are waiting to put my neck on the chopping board to say that I do not know my work.’’
What you should know
- Despite Nigeria’s surprise exit from recession, experts have still expressed their reservations about the country’s weak economy which is faced with several challenges for businesses ranging from foreign exchange pressure, high unemployment level, increasing consumer prices, serious security challenges, weak investor confidence, etc.
- This is as the growth in GDP was primarily driven by the Information and Communication sector and the Agricultural sector.
- However, the surprise rebound of the economy means that Nigeria may recover faster than expected as crude oil prices and production increase this year.
- This also shows that the country needs to redouble its efforts in the growth of the non-oil sector which contributed 94.13% to Nigeria’s GDP.
Aviation’s real GDP contracts by 36.98% in 2020
Real GDP contracted by 36.96% in 2020 compared to the 13.17% recorded in 2019.
The real Gross Domestic Product of the aviation sector contracted by 36.96% in 2020 compared to the 13.17% recorded in 2019.
This was disclosed by the National Bureau of Statistics in its Q4 2020 GDP and full-year 2020 report on Thursday.
It tweeted, “Air Transport under Transportation & Storage real GDP contracted -51.69% compared to -38.86% in Q3 2020 & -14.98% in Q4 2019. 2020 Air transport real GDP contracted -36.98% compared to 13.17% in 2019.”
Q4 2020 GDP& Full year 2020 report published @ https://t.co/ucXR0UbrMw
Air Transport under Transportation & Storage real GDP contracted -51.69% compared to -38.86% in Q3 2020 & -14.98% in Q4 2019.
2020 Air transport real GDP contracted -36.98% compared to 13.17% in 2019 pic.twitter.com/6FnYxuO0ng
— Dr Yemi Kale (@sgyemikale) February 18, 2021
What you should know
Nairametrics reported last year that contribution of the Aviation industry to Nigeria’s economy (in nominal value) increased by 0.14% in 2019, as it rose to N198.62 billion. This was disclosed by the National Bureau of Statistics (NBS). But there are concerns that the feat would not be repeated or surpassed in 2020, as the industry is expected to suffer a decline.
Prior to 2019, the Aviation Industry contributed N149.35 billion to the country’s gross domestic product in 2018, representing 0.12%, but in 2019, the figure increased due to political activities in Nigeria. Nigeria held its elections last
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