Nigeria’s Gross Domestic Product (GDP) grew by 5.01 per cent year-on-year in real terms in the second quarter of 2021, latest report released Thursday by the National Bureau of Statistics has shown.
According to the report obtained by Business Metrics, the economy has expanded for three consecutive quarters following the negative growth rates recorded in the second and third quarters of 2020.
The Q2 2021 growth rate was higher than the -6.10 per cent growth rate recorded in Q2 2020 and the 0.51 per cent recorded in Q1 2021 year on year, indicating the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions.
The steady recovery observed since the end of 2020, with the gradual return of commercial activity as well as local and international travel, accounted for the significant increase in growth performance relative to the second quarter of 2020 when nationwide restrictions took effect.
Year to date, real GDP grew 2.70 per cent in 2021 compared to -2.18 per cent for the first half of 2020. Nevertheless, quarter on quarter, real GDP grew in the negative at -0.79 per cent in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.
In the quarter under review, aggregate GDP stood at N39,123,713.32 trillion in nominal terms, higher than the second quarter of 2020 with aggregate GDP of N34,023,197.60 trillion. This indicates a year on year nominal growth rate of 14.99 per cent.
Meanwhile, the nominal GDP growth rate in Q2 2021 was higher than -2.80 per cent growth recorded in the second quarter of 2020 when economic activities slowed sharply at the outset of the pandemic.
The Q2 2021 nominal growth rate was also higher than 12.25 per cent growth recorded in Q1 2021. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors (Figure 1).
Figure 1: Real GDP growth rate
The Oil Sector
In the second quarter of 2021, average daily oil production stood at 1.61 million barrels per day (mbpd), which is -0.19mbpd lower than the average daily production of 1.81mbpd recorded in the same quarter of 2020 and -0.10mbpd lower than the 1.72mbpd recorded in the first quarter of 2021 (Figure2).
Figure 2: Crude Oil Output (MBPD)
Real growth of the oil sector was -12.65 per cent year-on-year in Q2 2021 indicating a decrease of -6.02 percentage points relative to the growth rate recorded in the corresponding quarter of 2020.
Growth decreased by -10.44 per cent when compared to Q1 2021 which was -2.21 per cent. For the first half of 2021, real GDP was recorded at -7.13 per cent, compared to -0.80 per cent for the first half of 2020, the performance reflecting lower oil output.
Quarter-on-quarter, the oil sector recorded a growth rate of -20.35 cent in Q2 2021.
In the final analysis, the oil sector contributed 7.42 per cent to total real GDP in Q2 2021, down from figures recorded in the corresponding period of 2020 and down compared to the preceding quarter, where it contributed 8.93 per cent and 9.25 per cent respectively.
The Non-Oil Sector
The non-oil sector grew by 6.74 per cent in real terms during the reference quarter of April to June, 2021.
The growth rate in the quarter was higher by 12.80 per cent points compared to the rate recorded in the same quarter of 2020 and 5.95 per cent points higher than the first quarter of 2021.
During the quarter, the sector was driven mainly by growth in Trade, Information and Communication (Telecommunication), Transportation (Road Transport), Electricity, Agriculture (Crop Production) and Manufacturing (Food, Beverage & Tobacco), reflecting the easing of movement, business and economic activity across the country relative to the same period a year earlier.
In real terms, the Non-Oil sector contributed 92.58 per cent to the national GDP in the second quarter of 2021, higher from shares recorded in the second quarter of 2020 which was 91.07 per cent and the first quarter of 2021 recorded as 90.75 per cent.