The Nigerian Bureau of Statistics (NBS) has said that the nation’s economy contracted in the 3rd Quarter of 2021.
The Gross Domestic Product (GDP) growth rate reduced from 5.01% of quarter two of 2021 to 4.03% in quarter three (Q3)
NBS, however, stated that the contraction of Q2 and Q3 of 2020 has resulted to positive growth as recorded consecutively for the last three quarters of Q4, 2020; Q1, 2021 and Q2, 2021 with 0.11%, 0.51%, and 5.01% respectively.
The GDP is crucial to understanding the structure and trends of an economy, which by implication measures the performance of the economy within a given period of time.
The overview of the NBS report as released on Thursday pointed out that Nigeria’s GDP grew by 4.03%(year-on-year) in real terms in the third quarter of 2021, showing a sustained positive growth over the last four quarters since the recession occurred in 2020.
Output reduced by -6.10% and -3.62% in Q2 and Q3 of 2020 under the COVID-19 pandemic. The Q3 2021 growth rate was higher than the -3.62% growth rate recorded in Q3 2020 by 7.65% points and lower than 5.01% recorded in Q2 2021 by 0.98% points, indicative of a continuous recovery.
Regardless, quarter-on-quarter, real GDP grew at 11.07% in Q3 2021 compared to Q2 2021, indicating a higher economic activity than the previous quarter.
In the quarter under review, aggregate GDP was at N45,113,448.06 million in nominal terms. This performance is better when compared to the third quarter of 2020 which recorded aggregate GDP of N39,089,460.61 million, showing a year-on-year nominal growth rate of 15.41%.
The nominal GDP growth rate in Q3 2021 was greater relative to 3.39% growth recorded in the third quarter of 2020 as well as the 14.99% growth recorded in the preceding quarter.
It categorized the Nigerian economy into the oil and non-oil sectors.
In the oil sector, the report said that the nation, in the third quarter of 2021 recorded an average daily oil production of 1.57 million barrels per day (mbpd).
This figure was lower than the daily average production of 1.67mbpd recorded in the same quarter of 2020 by 0.10mbpd and lower than the second quarter of 2021 production volume of 1.61mbpd by 0.05mbpd.
It also said that real growth of the oil sector was –10.73 per cent (year-on-year) in quarter three 2021, indicating an increase by 3.16 per cent compared to the rate recorded in the corresponding quarter of 2020.
It added that the oil sector contributed 7.49 per cent to total real GDP in the quarter,lower from figures recorded in the corresponding period of 2020 and up relative to the preceding quarter, where it only contributed 8.73 per cent and 7.42 per cent respectively.
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While for the non-oil sector, the NBS said that it grew by 5.44 per cent in real terms during the reference quarter, higher by 7.95 per cent compared to the rate recorded in the same quarter of 2020 and 1.30 per cent lower than the second quarter of 2021.
“In real terms, the non-oil sector contributed 92.51 per cent to the nation’s GDP in the third quarter of 2021, bigger than the share recorded in the third quarter of 2020 which was 91.27 per cent and lesser than the second quarter of 2021 which recorded 92.58 per cent,” NBS said.
The NBS report indicated that Transportation and Storage sector; Financial and Insurance sector; and Electricity, Gas, Steam and Air Conditioning Supply sector have shown strong growths during the third quarter of 2021.
Therefore, the fastest growing activities in real terms during the third quarter 2021 GDP estimates were Rail Transport and Pipeline (59.93%); Metal Ores (54.92%); Air Transport (33.31%); Financial Institutions (25.50%); Road Transport (21.11%); Water Transport (16.30%) and Electricity, Trade (11.90%) Gas, Steam and Air Conditioning Supply (14.36%).
Nevertheless, some of the slowest growing activities include Oil Refining (-47.83%); Crude Petroleum and Natural Gas (-10.73%); Quarrying and Other Minerals (-4.20%); Coal Mining (-4.20%); Fishing (-3.97%) and Public Administration (-0.15%).
While Road usage experienced high demand in third quarter 2021, growth in rail transportation was as a result of passengers’ decisions to use train as an alternative to road.
Also, Air travel has increased with the easing of travel restrictions both domestically and internationally. Wholesale and Retail Trade continues to show strong performance over 2020 when trading activities were largely restricted due to the Covid-19 pandemic. In addition, there has been an improvement in electricity generation and distribution during the quarter as well as financial services.
On a large scale sectoral performance, Agriculture grew by 1.22% during the third quarter of 2021 in real terms lower than third quarter 2020 which recorded 1.39%. Industry grew by -1.63%, an improvement over third quarter, 2020 growth of -6.12% and Services accounted for 8.41% growth, also an improvement from -5.49% in third quarter 2020.
Agriculture, Industry and Services contributed 29.94%, 20.41% and 49.65% respectively to GDP. In contrast, Agriculture, Industry and Services contributed 30.77%, 21.59% and 47.64% respectively in third quarter 2020. This shows higher contribution of services in third quarter 2021 in relation to the third quarter of 2020.
Speaking on the GDP report on Thursday in Abuja, Mr. Simon Harry, the Statistician-General of the Federation clarified that the negative GDP figures recorded in 2020 as a result of the COVID-19 pandemic had serious base effects on the GDP figures for quarters two and three 2021.
“You will recall that the contraction of quarters two and three of 2020 has resulted to positive growth as recorded consecutively for the last three quarters of quarter four, 2020 with 0.11 per cent, quarter one, 2021 with 0.51 per cent and quarter two, 2021 with 5.01 per cent.
“These base effects continued to quarter three of 2021 recording a growth of 4.03 per cent,” Harry said.
Mr. Harry further said that the improvement being seen in the output growth over the last four quarters showed a steady progress made in alleviating the COVID-19 pandemic and the associated negative impact on livelihood, well-being and the economy.
“Globally, many countries have witnessed an improvement in economic performances compared to 2020 when Covid-19 was endemic.Thus, economic recovery is a gradual process that requires consistent collective efforts to improve economic activities across the institutional sectors.”
“However, in Nigeria, the prospect of full recovery is glaring provided the current trend of improved economic performance is sustained in the rest of the year and beyond. It is important to also mention that annual GDP growth of 2021 stands at -1.92 per cent” He said.
