The latest Gross Domestic Product(GDP) report from the National Bureau of Statistics(NBS) for 2nd Quarter 2021 (Q2 2021) greeted everyone with a surprise as it grew by 5.01% year on year, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.
This performance according to the NBS, is attributed to the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions. The growth of 5.01% indicates the highest single quarterly GDP growth since 2014.
In the quarter under review, aggregate GDP stood at N39.12trn in nominal terms, higher than the second quarter of 2020 with aggregate GDP of N34.02trn, indicating a year on year nominal growth rate of 14.99 per cent.
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. The the oil sector contribution to GDP declined from 9.25% in the previous quarter to 7.42%.
The Non-Oil Sector
The non-oil sector grew by 6.74% in real terms during the reference quarter (Q2 2021). The Q2 2021 growth rate was higher by 12.80% compared to the rate recorded in the same quarter of 2020.
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).
The Non-Oil sector contributed 92.58% to the nation’s GDP in the second quarter of 2021, higher from shares recorded in the second quarter of 2020 which was 91.07% and the first quarter of 2021 recorded as 90.75%.
According to the NBS, “the growth of 5.01% is attributed to the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions”. We believe the Nigerian economy was growing below 3% prior to the Covid-19 restrictions and feel the growth is attributed to the performance of the non-oil sector especially sectors like information and communication that have posted significant growth since the pandemic. Also the base effect coming from a negative of 6 percent same time last year is reflected in the result.
During the quarter under consideration, the agricultural sector grew by 1.30%, indicating a decrease from 2.28% in Q1 2020 and 1.58% in Q2 2020. This we believe is indicative of the security crises in the north leading to food shortage and fall in levels of farming and crop production.
This result lastly reflects the resilience of the Nigerian economy and a pointer to the Nigerian government commitment towards the growth of the economy.