Posted Mon, Feb 21, 2022 12:19 PM

NESG GDP Alert Q4’2021

Nigeria's economic recovery was sustained with a 3.98 percent growth in Q4'2021. The Nigerian economy posted a high real Gross Domestic Product (GDP) growth rate of 3.98 percent in the fourth quarter of 2021, sustaining the strong economic recovery momentum seen in the second and third quarters of the year. Cumulatively, the economy expanded by 3.4 percent in 2021, compared to a contraction of 1.9 percent in 2020. Furthermore, the 2021 full-year real GDP growth represents Nigeria's most robust annual economic expansion since 2017, when the country exited its first recession in the last decade. The strong economic recovery can be attributed to significant improvements in non-oil sector performance and the complete re-opening of the economy to productive activities.

In nominal terms, the size of the economy in 2021 stood at N173.5 trillion. This represents a 13.9 percent increase when compared to N152.3 trillion in 2020. However, the economy's per capita income fell by 4.0% to US$2,010 in 2021 from US$2,093 in 2020. Despite the significant economic growth, the decline in per capita income could be attributed mainly to the depreciation of the domestic currency against the US dollar.

Nigeria's oil sector remained in recession while the non-oil sector continued to drive overall economic performance. The non-oil sector accounted for 92.8 percent of the country’s GDP and grew by 4.4 percent in 2021. When compared to a 1.3 percent contraction in 2020, growth in 2021 represents a significant improvement. This performance was bolstered by strong growth in strategic sectors such as transportation and storage (16.3 percent), financial services (10.1 percent), trade (8.6 percent), information and communication (6.6 percent), manufacturing (3.4 percent), construction (3.1 percent), real estate (2.3 percent), and agriculture (2.1 percent).

Instructively, ICT and financial services are found to be relatively resilient to the devastation caused by COVID-19 and the economic shocks that result from it. This explains the sectors’ high productivity and contribution to Nigeria’s economic growth in recent time. Meanwhile, despite a recovery in global oil prices for most of the year, the oil sector continued its negative growth trend. The sector’s productivity declined by 8.3 percent in 2021, compared to a negative growth rate of 8.9 percent in 2020. The poor performance of the oil sector can be attributed to a drop in domestic crude oil production, which fell to 1.4 million barrels per day (mbpd) in 2021 from 1.6 mbpd in 2020. Sub-sector Assessment Agricultural sector maintained its resilient posture to economic shocks in 2021 Although agricultural growth has slowed slightly to 2.1 percent in 2021 from 2.2 percent in 2020, the sector remains the most resilient, having sustained growth for five consecutive quarters since the economic recession of 2020. Specifically, in Q4-2021, the sector’s growth stood at 3.6 percent, representing 2.0 percentage points increase when compared with 1.6 percent growth in the fourth quarter of 2020. The impressive performance of the agricultural sector, particularly in the last quarter of 2021, was largely due to faster growth in crop production (3.9 percent) and fishing (1.7 percent) sub-sectors in the quarter.