Nigeria’s Gross Domestic Product (GDP) grew by 4.03% (year-on-year) in real terms in the third quarter of 2021, showing a sustained growth over the last four quarters since the recession witnessed in 2020.
This is according to the recently published GDP report by the National Bureau of Statistics (NBS).
According to the report, Nigeria’s real GDP grew by 4.03% in Q3 2021, representing a slower growth compared to 5.01% recorded in the previous quarter. On a quarter-on-quarter basis, real GDP grew by 11.07% in Q3 2021 compared to Q2 2021, reflecting a higher economic activity than the preceding quarter.
Meanwhile, the oil sector contracted by 10.73% year-on-year in the same period. The contraction, which is largely attributed to decline in crude oil production. Notably according to the NBS, Nigeria oil production in the review period stood at 1.57mpd compared to 1.61mbpd recorded in the previous quarter and 1.67mbpd recorded in the corresponding period of 2020.
On the other hand, the non-oil sector grew by 5.44% in real terms during the reference quarter (Q3 2021). The growth recorded in the non-oil sector was mainly driven by trade, Information and Communication (Telecommunication).
Other drivers include Financial and Insurance (Financial Institutions); Manufacturing (Food, Beverage & Tobacco); Agriculture (Crop Production); and Transportation and Storage (Road Transport).
In real terms, the non-Oil sector contributed 92.51% to the nation’s GDP in third quarter 2021, higher from the share recorded in the third quarter of 2020 which was 91.27% and lower than the second quarter of 2021 recorded as 92.58%.
Highlights
In Q3 2021, aggregate GDP stood at N45.1 trillion in nominal terms. This performance is higher when compared to the third quarter of 2020 which recorded aggregate GDP of N39.1 trillion. This represents a year-on-year nominal growth rate of 15.41%.
- Manufacturing sector in real terms grew by 4.29% year-on-year in Q3 2021 compared to a contraction of 1.51% recorded in the corresponding period of 2020.
- Rail transportation and pipeline expanded by 59.93% in Q3 2021, an improvement compared to 53.28% recorded in the previous quarter, and even more compared to a contraction of 46.64% recorded in Q3 2020.
- Financial and Insurance sector grew by 23.23% from a decline of 2.48% recorded in Q2 2021 and 3.21% growth recorded in the corresponding period of 2020.
- Meanwhile, oil refining contracted by 47.83% in the review period, representing the sector with the highest contraction in Q3 2021.
Agriculture contribution to the nation’s GDP increased from 23.78% recorded in the previous quarter to 29.94% in the review period. When compared to the corresponding period of 2020, it however reduced by 0.83% points from 30.77% recorded in Q3 2020.
What this means
Nigeria posted its fourth consecutive quarterly economic growth, indicating recovery from the economic recession recorded in the previous year as a result of the covid-19 pandemic. Real GDP grew by a record 5.01% in the previous quarter, owing to a favourable baseline, which is the same as the current period as Nigeria’s GDP actually contracted by 3.62% in the corresponding 2020 period.
This is a welcome development, emphasis should be geared towards non- oil sectors.
Nigeria has to come out of this financial crisis
This improvement are yet to be felt in both micro/macro indices