How Nigeria’s 2021 GDP Beats Projections

The National Bureau of Statistics, in its quarterly report, has published that the country’s Gross Domestic Product grew by 3.98 percent in the fourth quarter of 2021.

This, which is considered as the strongest growth since 2014, translates to 3.4 percent as the annual GDP growth for 2021.

According to the bureau, “Nigeria Gross Domestic Product grew by 3.98 percent (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 percent and -3.62 percent in Q2 and Q3 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 Q4 2021 growth rate was higher than the 0.11 per cent growth rate recorded in Q4 2020 by 3.87 per cent points and lower than 4.03 per cent recorded in Q3 2021 by 0.05 per cent points. Nevertheless, quarter on quarter, real GDP grew at 9.63% in Q4 2021 compared to Q3 2021, reflecting a higher economic activity than the preceding quarter.”

Projections on 2021 GDP

In October, the International Monetary Fund projected that Nigeria’s economy would grow by 2.6 percent in 2021. This was an increase from 2.5 percent earlier projected in July due to the slow roll out of COVID-19 vaccine.

Also, in October, the World Bank forecasted that the country’s GDP would grow to 2.4 percent in 2021. In January, the Bretton Wood institution had projected a 1.1 percent growth rate for the country in 2021 after the COVID-19-induced sharp recession in 2020.

It however raised the projection to 1.8 percent in June after observing the assumption that oil prices will continue to rise, a gradual implementation of structural reforms in the oil sector, and a market-based flexible exchange rate management.

For Bloomberg, a privately held financial, software, data, and media company, Nigeria’s economy was predicted to expand by 1.5% in 2021, it predicted this after it shrunk 1.92% last year, the most since at least 1991.

Against all these predictions, when compared to the previous quarter (2020), growth was recorded, on nominal growth, in agriculture, manufacturing, electricity, water supply, construction, trade, accommodation and food service, transport and storage, real estate, administrative, entertainment and education.

On  real GDP, sectors that improved positively are manufacturing, electricity, water supply, construction, trade, transportation, human health, real estate and the financial sector.

Highlights of the GDP growth

  • Non-oil sector contributed more to the country’s GDP than the oil sector in 2021.
  • Services sector contributed more to the country’s GDP than industries and agriculture in 2021.
  • The 2021 GDP rate is considered as the fastest expansion since 2014.
  • The oil sector contracted for the second year after a decline of crude oil production to 1.5 million barrels per day(mbd) in the fourth quarter (Q4’2021) from 2.07mbd in the first quarter of 2020 (Q1’2020).

Kehinde Ogunyale

Reporting on the data-driven economy, and investigations.

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