Nigeria’s Gross Domestic Product (GDP) grew by 5.01% (year-on-year) in real terms in the second quarter of 2021, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.
This is according to the recently published GDP report, released by the National Bureau of Statistics (NBS).
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.
The non-oil sector grew by 6.74% in real terms while the oil sector declined by 12.65% year-on-year.
The contribution of the non-oil sector grew from 90.75% recorded in the previous quarter to 92.58% in Q2 2021 while the oil sector contribution declined from 9.25% to 7.42%.
Year to date, real GDP grew 2.70% in 2021 compared to -2.18% for the first half of 2020. Nevertheless, quarter on quarter, real GDP grew at -0.79% in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.
Oil sector
The oil sector contracted by 12.65% (year-on-year) in Q2 2021 indicating a decrease of –6.02% points relative to the growth rate recorded in the corresponding quarter of 2020. Growth decreased by -10.44% points when compared to Q1 2021 which was –2.21%.
In Q2 2021, average daily oil production stood at 1.61 million barrels per day (mbpd), which is -0.19 mbpd lower than the average daily production of 1.81 mbpd recorded in the same quarter of 2020 and -0.10 mbpd lower than the 1.72 mbpd recorded in the first quarter of 2021.
Also, in the first half of 2021, real GDP was recorded at -7.13%, compared to -0.80% 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% in Q2 2021.
Non-oil sector
The non-oil sector grew by 6.74% in real terms in the review period (Q2 2021). The Q2 2021 growth rate was higher by 12.80% points compared to the rate recorded in the same quarter of 2020 and 5.95% 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).
This reflects the easing of the restrictions on movement, business and economic activity across the country compared to the corresponding period of 2020.
According to the report, Electricity, gas, steam and air conditioning supply recorded the highest year-on-year in sectoral growth with 78.19% expansion rate, followed by the transportation and storage sector which grew by 76.8% in the review period.
Others include Trade (22.5%), Water supply and waste management (18.5%), ICT (5.5%), and human health services with 4.9% growth rate.
What this means
The latest GDP figures is an indication of recovery from the economic recession recorded in the previous year, largely attributed to ease on the restriction of movement and the resumption of economic activities. However, the growth of 5.01% is also this high due to the significant dip recorded in the corresponding period of 2020.