Nigerians’ household expenditure rose to N54.84 trillion in nominal terms in the first half of 2021, representing a 13.7% increase when compared to N48.22 trillion recorded in the corresponding period of 2020. This is contained in the recently released Expenditure and Income GDP report, by the National Bureau of Statistics (NBS).
According to the report, the expenses incurred by Nigerian households increased by 13.7% when compared with the corresponding period of 2020 However, in contrast with the second half of last year shows a 7.45% decline compared to N59.25 trillion.
Household final expenditure consists of expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services.
A further breakdown shows that household final consumption expenditure grew by 8.90% in Q1, and 19.08% in Q2 2021, The annual growth rate of -0.57% was recorded in 2020. This growth rate was lower by -10.42% points than the figure recorded in the previous year which stood at 9.85%.
- Final consumption expenditure of non-profit institutions serving household stood at N504.38 billion, which is 18.6% higher than N425.29 billion recorded in the previous period.
- Also, the final consumption expenditure of the general government stood at N4.23 trillion in the review period.
- Net exports contracted in real terms in Q1 and Q2 2021 by 110.50% and 74.49% respectively. On an annual basis, net exports also contracted by 30% in 2020 compared to 7.64% growth recorded in 2019.
- Compensation of Employees, during the first and second quarters of 2021 grew by 9.26%, and 19.44% respectively in real terms on a year-on-year basis. For 2020, growth rate stood at 0.96% compared to 8.99% in 2019.
- National Disposable Income declined by 2.25% in the first quarter of 2021 and 5.35% in second quarter 2021, but recorded growth of 3.57% and 2.12% in Q1 and Q2 of 2020 on a year-on-year basis in real terms, resulting a better growth rate of 1.57% for annual figure in 2020 compared to a relatively marginal growth rate in end 2019 (0.35%).
The year-on-year growth is line with the expansion recorded in the countries national GDP in the first and second quarter of the year. Recall that Nigeria’s GDP in real terms grew by 0.51% and 5.01% in Q1 and Q2 2021, owing to a favorable base period.
Household Consumption accounted for the largest share of real Gross Domestic Product at market prices, representing 53.68% and 51.82% in Q1 and Q2 2020 respectively, compared to 76.83% and 72.88% in the corresponding quarters of 2021.
What you need to know
The Gross Domestic Product (GDP) can be derived as the value of all goods and services available for final uses and export.
The expenditure approach measures the final uses of the produced output as the sum of Final consumption, Gross Capital Formation and Exports less Imports.
Household final consumption expenditure consists of expenditure incurred by resident households on individual consumption of goods and services.