GDP growth exits Nigeria from recession – NBS

By Chukwuemeka Emmanuel

The National Bureau of Statistics (NBS) says Nigeria has exited recession.

In its quarterly report released on Thursday, the bureau said the
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.

Though weak, the NBS explained that positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters.

Recall that Nigeria entered recession, the second time on 23rd November 2020, regarded by experts as the worst recorded by the country in almost four decades.
Official data released NBS then indicated that Nigeria’s economy slipped into the recession for the second time in four years as a result of oil prices plunging in the midst of the COVID-19 pandemic.

The country’s gross domestic product (GDP) then contracted by 3.62 percent year-on-year in real terms in the third quarter of 2020, the National Bureau of Statistics (NBS) reported, attributing the contraction to slow oil production and the COVID-19 pandemic.

With this development, Nigeria has exited recession twice in five years under the same administration.

According to the report, while the Q4 2020 growth rate was lower than growth rate recorded in the previous year by –2.44% points, it was higher by 3.74% points compared to Q3 2020.

On a quarter on quarter basis, real GDP growth was 9.68% indicating a second positive consecutive quarter on quarter real growth rate in 2020 after two
negative quarters.

Overall, it was indicated that in 2020, the annual growth of real GDP was estimated at –1.92%, a decline of –4.20% points when compared to the 2.27% recorded in 2019.

“In the quarter under review, aggregate GDP stood at N43,564,006.29 million in nominal terms. This performance is higher when compared to the fourth quarter of 2019 which recorded a GDP aggregate of
N39,577,340.04 million, representing a year on year nominal growth rate of 10.07%.

“This growth rate was lower relative to growth recorded in the fourth quarter of 2019 by –2.26% points but higher than the
preceding quarter by 6.68% points with growth rates recorded at 12.34% and 3.39% respectively.”

Oil sector
In the fourth quarter of 2020, the NBS said an average daily oil production of 1.56 million barrels per day (mbpd) was recorded. This was lower than the daily average production of 2.00mbpd recorde.

“Real growth of the oil sector was –19.76% (year-on-year) in Q4 2020 indicating a decrease by –26.12% points relative to the rate recorded in the corresponding quarter of 2019. Growth decreased by –5.87%
points when compared to Q3 2020.

“Quarter-on-quarter, the oil sector recorded a growth rate of –26.27% in Q4 2020. For 2020, the oil sector grew at –8.89% compared to 4.59% in 2019. The oil sector
contributed 5.87% to total real GDP in Q4 2020, down from the corresponding period of 2019 and the preceding quarter, where it contributed 7.32% and 8.73% respectively.”

Non Oil sector
On the other hand, 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% growth rate recorded in the preceding quarter. For the full year of 2020 however, the non-oil sector grew –1.25% compared to 2.06% in 2019.

“Growth in the sector was 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,
accounting for positive GDP. 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%). For 2020, the Non-Oil sector contributed 91.84% to real GDP, higher than 91.22% recorded in 2019.”

Mining & Quarying
The Mining & Quarrying sector which consists of Crude Petroleum and Natural Gas, Coal Mining, Metal ore and
Quarrying and other Minerals sub-activities, grew nominally by –12.32% (year on year) in Q4 2020 while annual growth rate was –15.02% in 2020.

“Quarrying and other minerals exhibited the highest growth rate of all the sub-activities at 117.48%, followed by metal ore activity at 2.73%. However, Crude Petroleum and Natural gas was the main contributor to the sector with a weight of 86.79% in Q4 2020, and 93.95% for the annual contribution. The performance in Q4 2020 indicates a decline of -25.07% points compared to the previous year, but an increase of 7.60% points compared to the preceding quarter.

“The Mining & Quarrying sector contributed 5.46% to overall GDP in the fourth quarter of 2020, lower than the contributions recorded in Q4 2019 (6.86%) and 7.65% recorded in the preceding quarter. Overall
contribution in 2020 was recorded at 7.12% against 8.85% recorded in 2019.
In real terms, the Mining and Quarrying sector grew by –18.44% (year-on-year) in the fourth quarter of 2020. Compared to the same quarter of 2019 and third quarter 2020, it was lower by –24.51% points and
–5.22% points respectively. Quarter on quarter, the growth rate recorded was –25.02%.

“This sector recorded an annual growth rate of –8.54% in 2020, compared to 4.43% recorded in 2019. The contribution of Mining and Quarrying to Real GDP in Q4 2020 stood at 6.09%, lower than the rate of 7.48% recorded in Q4 2019 and 8.91% recorded in the third quarter of 2020. Nevertheless, annual contribution to real GDP stood at 8.31% in 2020 from 8.91% recorded in 2019.”

Agriculture
For agric sector consists of four sub-activities: Crop Production, Livestock, Forestry and Fishing, it grew by 14.03% year-on-year in nominal terms in Q4 2020, showing a rise of 0.23% points from the
same quarter of 2019.

“Looking at the preceding quarter’s growth rate of 13.52%, there was an increase of
0.51% points. The annual growth rate for the agricultural sector stood at 16.73% in 2020, slightly higher than in 2019.

Crop Production remained the major driver of the sector, as it accounts for 89.67% of overall nominal growth of the sector in Q4 2020 and 91.44% share in 2020. Quarter on quarter growth stood at –4.98% in Q4 2020.

Agriculture contributed 24.23% to nominal GDP in the fourth quarter of 2020, higher than the rates recorded for the fourth quarter of 2019 but lower than the third quarter of 2020 which
recorded 23.38%.

“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%. It grew on a quarter on quarter basis at –3.93%. Real annual growth rate in 2020 was 2.17%.”

However, the sector contributed 26.95% to overall GDP in real terms in Q4 2020, higher than the contribution in the fourth quarter of 2019 but lower than the third quarter of 2020 which stood at 26.09% and 30.77% respectively. The annual 2020 contribution stood at 26.21%.

Manufacturing
The Manufacturing sector which comprised of thirteen activities: Oil Refining; Cement; Food, Beverages and
Tobacco; Textile, Apparel, and Footwear; Wood and Wood products; Pulp Paper and Paper products; Chemical and Pharmaceutical products; Non-metallic Products, Plastic and Rubber products; Electrical and Electronic, Basic Metal and Iron and Steel; Motor Vehicles and Assembly; and Other Manufacturing.

“Nominal GDP growth of the Manufacturing sector in the fourth quarter of 2020 was recorded at 24.60% (year-on-year), -1.69% points lower than recorded in the corresponding period of 2019 (26.29%) but 11.06% points higher than the preceding quarter’s 13.54%. Quarter on quarter growth of the sector was recorded at 5.78%. The Manufacturing sector recorded a growth rate of 16.44% in 2020, compared to 34.73% in 2019.

“The contribution of Manufacturing to Nominal GDP in the fourth quarter of 2020 was 12.87%, higher than the corresponding period of 2019 at 11.37% but lower than the third quarter of 2020 at 13.56%. Annual contribution was recorded at 12.83%, higher than the 11.64% recorded in 2019.

Real GDP growth in the manufacturing sector in the fourth quarter of 2020 was –1.51% (year on year), lower than the same quarter of 2019 and the preceding quarter by –2.75% points and –0.01% points
respectively. Growth rate of the sector, on a quarter-on-quarter basis, stood at 5.60%.

For 2020, sector growth was –2.75%. Real contribution to GDP in the fourth quarter of 2020 was 8.60%, lower than the
8.74% recorded in the fourth quarter of 2019 and the 8.93% recorded in third quarter 2020. Nevertheless, annual contribution stood at 8.99% in 2020″
End.