Nigeria’s Gross Domestic Product grew by 0.51% (year-on-year) in real terms in the first quarter of 2021. This is slower than the 1.87% growth recorded in the corresponding quarter of 2020 but higher than 0.11% recorded in the previous quarter (Q4 2020).
This is contained in the Nigerian Gross Domestic Product report, recently released by the National Bureau of Statistics (NBS).
According to the report, aggregate GDP stood at N40.01 trillion in nominal terms as against N35.65 trillion recorded in Q1 2020, while real GDP stood at N16.83 trillion in the review quarter.
The oil sector contracted by 2.21% (year-on-year) in Q1 2021, while the non-oil sector grew by 0.79% in the same period.
A cursory look at the report revealed that 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.
However, the Non-oil sector accounted for 90.75% of aggregate GDP in the first quarter of 2021.
- The agricultural sector grew by 2.28% in real terms in Q1 2021, with an aggregate real GDO of N3.76 trillion. The sector accounted for 22.35% of the total.
- The mining and quarrying sector contracted by 2.19% in Q1 2021, as against 4.58% growth recorded in the corresponding quarter of 2020. It however improved compared to a contraction of 18.44% recorded in Q4 2020.
- Also, the manufacturing sector grew by 3.4%, indicating the first expansion in the past three quarters.
- The financial and insurance sector contracted by 0.46% compared to a growth of 20.79% recorded in Q1 2020, and a 3.63% contraction in Q4 2020.
- Information and communication sector recorded a growth of 6.31% in Q1 2021, largely driven by growth recorded in the telecommunications sub-activity (+7.69%).
The oil sector contracted by 2.21% in real terms in the first quarter of the year, indicating a decrease of 7.27% points relative to the 5.06% growth rate recorded in the corresponding period of 2020. The contraction can be attributed to the reduction in Nigeria’s oil production during the period.
- In the first quarter of 2021, average 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 but higher than the production volume of 1.56mbpd recorded in the fourth quarter of 2020.
- Meanwhile, the contribution of the oil sector increased quarter-on-quarter from 8.16% recorded in the previous quarter to 9.25% in Q1 2021. It is however lower than 9.50% recorded in the corresponding period of 2020.
What this means
The growth recorded in Q1 2021, represents the second consecutive positive growth recorded since Nigeria’s economy dipped into recession in the third quarter of 2020. This implies that the economy is recovering from the contractions witnessed last year, although slowly.