Nigeria witnessed 3.4% growth in GDP during the fourth quarter of 2021 as recession ends

NIGERIA recorded a 3.4% increase in gross domestic product (GDP) during the course of 2021 in the first major sign that the economy is coming out of the recession according to recent statistics published by the National Bureau of Statistics (NBS).

Like many countries worldwide, Nigeria has suffered from the economic fallout of the coronavirus pandemic, leading to a near-collapse of the economy. For the last two years now, Nigeria has had to fund up to a third of her annual budget with borrowing from financial organisations like the World Bank, International Monetary Fund (IMF) and African Development Bank.

According to the NBS, the Nigerian economy is gradually beginning to show signs of recovery as during the course of 2021 there was GDP growth of 3.4%. This was the first annual growth since the Covid-19-induced recession of 2020 hit the country and represents the strongest growth in seven years since 2014.

This 3.4% GDP growth exceeds the World Bank and IMF’s 2021 projections of 2.5% and 2.7% respectively. Apparently, the strong GDP growth recorded in 2021 was driven by a rise in the non-oil sector which contributed 92.76% of GDP, powered by agriculture, trade, information & telecommunication and the financial cum insurance sub-sectors.

However, the oil sector contracted for the second year running weighted by a steady decline   in average crude oil production to 1.5m barrels per day  in the fourth quarter from 2.07m barrels in the first quarter of 2020. In the quarter under review, aggregate GDP stood at N49.28trn in nominal terms, compared with the fourth quarter of 2020 which recorded aggregate GDP of N43.56trn, indicating a year-on-year nominal growth rate of 13.11%.

An NBS spokesman said: “Nigeria’s GDP grew by 3.98% year-on-year in real terms in the fourth quarter of 2021, showing a sustained positive growth for the fifth quarter since the recession witnessed in 2020 when output contracted by -6.10% and -3.62% in the second and third quarters of 2020 under the Covid pandemic. The fourth quarter growth indicates a steady economic recovery accounting for annual growth of 3.40% in 2021.

"The fourth quarter 2021 growth rate was higher than the 0.11% growth rate recorded in the fourth quarter of 2020 by 3.87% points and lower than 4.03% recorded in the third quarter of 2021 by 0.05% points. Nevertheless, quarter-on-quarter, real GDP grew at 9.63% in the fourth quarter of 2021 compared to the third quarter of 2021, reflecting a higher economic activity than the preceding quarter.

Nigeria's non-oil sector grew by 4.73% in real terms during the firth quarter of 2021. This rate was higher by 3.05% points compared with the rate recorded same quarter of 2020 and 0.71% point lower than the third quarter of 2021.