Nigeria's GDP grew by a surprising 5% during the second quarter of 2021 as recovery begins

NIGERIA'S gross domestic product (GDP) grew by a surprising 5% during the second quarter of 2021 according to data just released by the National Bureau of Statistics (NBS) indicating that the country is recovering from the effects of the Covid-19 pandemic.

Over the last year-and-a-half, Nigeria has been hit hard by the coronavirus pandemic, as the fall in global commerce has devastated the federal government's finances. This year for instance, up to one third of the federal government's $33bn annual budget had to be funded by borrowing, as was the case in 2020.

It now appears that the country may be gradually turning the corner as according to the NBS, this now brings to three the number of consecutive quarters in which the economy has enjoyed GDP growth. This comes on the back of the negative growth rates recorded in the second and third quarters of 2020.

Nigeria's second quarter of 2021 growth rate compares with the -6.10% growth rate recorded in the second quarter of 2020 and the 0.51% recorded in the first quarter of 2021. According to the report, 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.

Year-to-date, real GDP grew by 2.70% in 2021 compared with -2.18% in the first half of 2020. Nevertheless, quarter-on-quarter, real GDP fell by -0.79% in the second quarter of 2021 compared with the first quarter, reflecting slightly slower economic activity largely due to seasonality.

In the quarter under review, aggregate GDP stood at N39.12trn in nominal terms, higher than the second quarter of 2020 which had an aggregate GDP of N34.02trn, indicating a year-on-year nominal growth rate of 14.99%. The nominal GDP growth rate in the second quarter of 2021 was higher than the -2.80% growth recorded in the second quarter of 2020 when economic activities slowed sharply at the outset of the pandemic.

In addition, the second quarter 2021 nominal growth rate was also higher than 12.25% growth recorded in the first quarter of 2021.