Nigeria Inching Out Of Recession As GDP Grows By 0.11% In Q4 2020


LAGOS – Nigeria’s Gross Domestic Product (GDP) surprisingly grew by 0.11 percent (year-on-year) in real terms in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters.

The National Bureau of Statistics (NBS) said on its website on Thursday that the gross domestic product grew positive in the three months through December from a year earlier, compared with a decline of 3.6 percent in the third quarter.

The median estimate of five economists in a Bloomberg survey was for a quarterly decline of 1.86 percent.

The economy contracted 1.92 percent for the full year, the most since at least 1991, according to International Monetary Fund data.

Though weak, the positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters.

As a result, while the Q4 2020 growth rate was lower than growth rate recorded the previous year by -2.44% points, it was higher by 3.74 percent points compared to Q3 2020.

On a quarter-on-quarter basis, real GDP growth was 9.68% indicating a second positive consecutive quarter- on-quarter real growth rate in 2020 after two negative quarters. Overall, in 2020, the annual growth of real GDP was estimated at -1.92 percent, a decline of -4.20 percent points when compared to the 2.27 percent recorded in 2019.

In the quarter under review, aggregate GDP stood at N43.564 billion in nominal terms.

This performance is higher when compared to the fourth quarter of 2019 which recorded a GDP aggregate of N39.577 billion, representing a year-on-year nominal growth rate of 10.07 percent.

This growth rate was lower relative to growth recorded in the fourth quarter of 2019 by -2.26 percent points but higher than the preceding quarter by 6.68 percent points with growth rates recorded at 12.34 percent and 3.39 percent, respectively.

For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors. Renowned economist, Mr. Bismarck Rewane, said the new GDP is good news for the country at a time like this. Rewane, who is the Managing Director/Chief Executive Officer of Financial Derivatives Company Limited, said, “This is good news to us. When you go positive, you are off the hook”. He added that, “Though the economy contracted in the last three quarters but in the fourth quarter, the economy expanded.

We came from -1.85 to -3.6 to now +0.11. So, we are now in positive territory and we are now out. We are out of recession.

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The surprise rebound means Africa’s largest economy may recover faster than expected as the oil price and output increase this year.

It could also point to the growing dominance of the noncrude sector, according to Joachim MacEbong, a senior analyst at SBM Intelligence in Lagos.

Cyril Ampka, an Abuja- based economist, said, “A stronger recovery could ease ressure on the central bank to stoke activity, paving the way for a renewed focus on its price stability mandate.

That means the monetary policy committee could start raising interest rates again to fight inflation that’s been above the target band of 6 percent to 9 percent for more than five years.

The panel eased by 200 basis points in 2020.” As a result, while the Q4 2020 growth rate was lower than growth rate recorded the previous year by –2.44 percentage points, it was higher by 3.74 percentage points compared to Q3 2020.

On a quarter-on-quarter basis, real GDP growth was 9.68 percent indicating a second positive consecutive quarter-on-quarter real growth rate in 2020 after two negative quarters.

Overall, in 2020, the annual growth of real GDP was estimated at –1.92 percent, a decline of –4.20 percent points when compared to the 2.27 percent recorded in 2019.

In the quarter under review, aggregate GDP stood at N43.564 billion in nominal terms.

This performance is higher when compared to the fourth quarter of 2019 which recorded a GDP aggregate of N39.577 billion, representing a year-on -year nominal growth rate of 10.07 percent.

This growth rate was lower relative to growth recorded in the fourth quarter of 2019 by –2.26 percent points but higher than the preceding quarter by 6.68% points with growth rates recorded at 12.34 percent and 3.39 percent, respectively.

In the fourth quarter of 2020, an average daily oil production of 1.56 million barrels per day (mbpd) was recorded.

This was lower than the daily average production of 2.00mbpd recorded in the same quarter of 2019 by -0.44mbpd and the third quarter of 2020 by -0.11mbpd.

Real growth of the oil sector was -19.76 percent (year-onyear) in Q4 2020 indicating a decrease by -26.12 percent points relative to the rate recorded in the corresponding quarter of 2019.

Growth decreased by -5.87 percent points when compared to Q3 2020. Quarter-on-quarter, the oil sector recorded a growth rate of -6.27 percent in Q4 2020. For 2020, the oil sector grew at -8.89 percent compared to 4.59 percent in 2019.

The oil sector contributed 5.87 percent to total real GDP in Q4 2020, down from the corresponding period of 2019 and the preceding quarter, where it contributed 7.32 percent and 8.73 percent, respectively.




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