According to the second-quarter Gross Domestic Production (GDP) report released by the Nigerian Bureau of Statistics (NBS), the finance and insurance sector contracted by 2.48% in Q2 2021, from contributing approximately N637 billion in the second quarter of 2020 to N621 billion in the second quarter of 2021. This shows a further deepening in the sector which declined by 0.46% in the first quarter of the year.
The Finance and Insurance sector consists of two subsectors which are the financial institution subsector which makes up 87.92% of the sector and the insurance sector which makes up for 12.08% of the subsector.
The financial institution subsector declined by -4.54% in the second quarter of the year. The decline in this subsector is the major reason the sector declined because it makes up for the lion share. In the first quarter of the year, the subsector grew marginally by 0.15% and in the second quarter of the previous year, the subsector gained 28.41%. comparing half-year performances, the financial institution subsector declined by 2.23% from contributing approximately 1.13 trillion in the first half of 2020 to 1.10 trillion in the first half of 2021.
The insurance subsector grew by 15.68% in the second quarter of the year. The increase in this subsector was unable to upset the deficit because it accounts for only 12% of the total sector. In the first quarter of the year, the subsector declined by 4.58% and in the second quarter of the previous year, the subsector also declined by 29.53%. comparing half-year performances, the insurance subsector appreciated by 4.32% from contributing approximately 148 billion in the first half of 2020 to 154 billion in the first half of 2021.
Looking at the half-year performance, the sector declined by 1.47%, from generating approximately 1.27 trillion in the first half of 2020 to approximately 1.25 trillion in the first half of 2021, representing a decline in monetary terms by approximately 18.72 billion.
In nominal terms, the finance and insurance sector declined by 1.86% Year-on-Year (YoY). The financial institution subsector declined by 3.93% while the insurance subsector grew by 16.41%. Quarter on Quarter (QoQ), the sector declined by 3.45%.
The contribution of this sector to the real GDP totaled 3.72%, lower than the 4.00% recorded in the second quarter of 2020 and the 3.77% recorded in Q1 2021. In terms of nominal GDP, this sector contributed 3.21%, lower than the 3.76% it contributed in the second quarter of 2020 and the 3.25% it accounted for in the previous quarter.
