Reviewing Nigeria’s 2021 GDP Growth (1)

The National Bureau of Statistics has reported that the country’s Gross Domestic Product increased by 4.03 percent in the third quarter of 2021.

This is contained in its Gross Domestic Product Report Expenditure and Income Approach report for Q3, Q4 2021. According to the report, in the third quarter of 2021, Nigeria’s real GDP at basic prices grew by 4.03 percent on a year-on-year basis showing a steady improvement from the economic downturn in 2020.

The NBS also said that growth improved further in the fourth quarter of 2021 with a positive GDP growth rate of 3.98 percent.

“The negative quarterly growths in Q2 and Q3 2020 resulted in a recession, which led to a negative annual growth rate of -1.92 per cent for 2020, compared to 2.27 per cent in 2019 on a year-on-year basis. ”

“Annual growth in 2021 stood at 3.40 per cent, an improvement of 2020. Compared to the third and fourth quarters of 2020, the performance in 2021 indicated an increase of 7.65 per cent points and 3.87 per cent points higher, respectively.’’

Household Consumption

Similarly, NBS said Household Consumption Expenditure in Q3 and Q4 2021, grew by 19.36 percent and 7.30 percent in real terms, year-on-year.

For 2021, the annual growth rate in real household consumption expenditure stood at 25.65 per cent compared to -1.69 per cent recorded in 2020.

“The observed trend in 2020 indicates that real household consumption expenditure declined in Q1 and Q2 accounting for negative growth rates informed by the COVID 19 pandemic.

“However, positive growth rates were recorded in Q3 and Q4 of 2020 as well as the four quarters of 2021.’’

Household consumption expenditure consists of expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services.

It said that Government Consumption Expenditure recorded growth rates of -39.51 per cent and -16.76 per cent in Q3 and Q4 of 2021 respectively, year-on-year.

The Bureau said the annual growth rate according to the report stood at -34.03 per cent in 2021, compared to 61.58 per cent in 2020.

Inflation threats

In March 2022, the country’s inflation rate, according to the NBS, rose to 15.92 percent. The new rate was the highest record since November 2021 rate of 15.43 percent. 

Twentyten Daily, while comparing the inflation rate across five years, discovered that Nigeria has, since 2020, had an increase in figures during the first quarter of the year respectively. 

Also, the World Bank had said that about 23 million Nigerians were pushed into a food crisis due to the impact of the COVID-19 pandemic-induced inflation in 2021.

In another analysis, the income of organizations, which plays a major role in the country’s economic growth assessment, have been under threat since the rise in inflation rate. This report captured that the cost of running organization are owing to the price increase of market products

Other parameters

The report said Net Exports recorded positive growth rates in the first two quarters of 2020 and shifted to negative growth rates in the third and fourth quarters of 2020.

The negative growth rate was also recorded in the first three quarters of 2021, a departure from the trend in 2019.

It, however, said that Net exports grew in real terms in Q3 and Q4 of 2021 by -38.27 per cent and 1.35 per cent respectively.

“On an annual basis, net exports grew by -55.77 per cent in 2021, compared to -13.17 per cent recorded in 2020.’’

The report said that National Disposable Income grew by -1.48 per cent in the third quarter of 2021 and 2.84 per cent in the fourth quarter of 2021.

However, a growth of 0.32 per cent and -1.28 per cent in Q3 and Q4 of 2020 on a year-on-year basis in real terms was recorded.

This gave a slower growth rate of -2.52 per cent for the annual figure in 2021, compared to a positive growth rate at the end of 2020 (1.07 per cent).

The report said Compensation of Employees during the third and fourth quarters of 2021 grew by 14.54 per cent, and 11.79 per cent respectively in real terms on a year-on-year basis.

“For 2021, the growth rate stood at 13.68 per cent compared to 0.96 per cent in 2020,’’ it said. 

Recall that the International Monetary Fund projected that Nigeria’s total public debt will rise steadily to 44.2 percent of Gross Domestic Product, GDP, by 2027.  

The IMF gave this forecast saying that the total fiscal spending of the General Government (Federal and state governments) will widen to 6.4 per cent of GDP this year, 2022, from 6.0 percent at the end of 2021.  the Debt Management Office, DMO, national public debt rose by 20 percent, year-on-year, YoY, to N39.56 trillion in 2021 from N32.92 trillion in 2020.

Kehinde Ogunyale

Reporting on the data-driven economy, and investigations.

Related post