By Yinka Kolawole & Elizabeth Adegbesan
Nigeria’s economy re-bounded in the fourth quarter of last year (Q4’20) as the nation’s Gross Domestic Product (GDP) grew year-on-year (y/y) by 0.11 percent, with aggregate GDP at N43.5trillion.
The development represents the first positive growth in the last three quarters of 2020 where GDP stood at 1.87 percent, -6.10 percent and -3.6 percent respectively. The economy however contracted by 1.92 percent for the full year 2020.
The return to positive GDP growth was driven by the Non-Oil sector which recorded 1.69% growth in Q4 2020, as against 2.51 contraction recorded in Q3’2020.
Disclosing this in its GDP Report (Q4’20) released yesterday, the National Bureau of Statistics (NBS) noted that the positive growth reflected the gradual return of economic activities in the country, following the easing of restricted movements and limited local and international commercial activities in the preceding quarters of the reviewed period.
The report stated: “Nigeria’s GDP grew by 0.11 percent (y/yr) in real terms in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters. “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 percent points, it was higher by 3.74 percent points compared to Q3’20.
“On a quarter on quarter basis, real GDP growth was 9.7 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 percentage points when compared to the 2.27 percent recorded in 2019.
“In the quarter under review, aggregate GDP stood at N43.5 trillion in nominal terms. This performance is higher when compared to the fourth quarter of 2019 which recorded a GDP aggregate of N39.5 trillion, representing a y/y 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 6.7 percentage points with growth rates recorded at 12.3 percent and 3.4 percent respectively.”
“The oil sector contributed 5.9 percent to total real GDP in Q4’20, down from the corresponding period of 2019 and the preceding quarter, where it contributed 7.3 percent and 8.7 percent respectively. For 2020, the Non-Oil sector contributed 91.8 percent to real GDP, higher than 91.2 percent recorded in 2019.”
Commenting on the nation’s return to economic growth, the Lagos Chamber of Commerce and Industry (LCCI) said that the nation’s economic recovery seem be faster than expected but warned that the pace of recovery is expected to be subdued within the region of one and two percent.
In a statement made available to Vanguard yesterday, said: “LCCI notes the improvement in quarterly output performance as real GDP growth rose by 0.11 percent in Q4-2020, compared to 3.62 percent contraction in the preceding quarter. The quarterly performance was a pleasant surprise.”
On the outlook for 2021, he said: “The current downturn is expected to be short-lived going forward. There are indications that recovery might be faster than expected however the pace of recovery is expected to be subdued within the region of one and two percent.
“The country’s recovery prospects in year 2021 will be dependent on five key factors including: effective management of the pandemic locally and globally; widespread vaccine rollout; direction of global oil market; fiscal and monetary policy direction; and ease of doing business reforms.
Yusuf added that accelerating the pace of economic recovery will require fiscal and monetary authorities to be well coordinated to promote growth-enhancing and confidence-building policies that would encourage more private capital inflows into the economy.
“Investment-led growth strategy is critical for inclusive and sustainable economic growth. Strong commitment to key reforms will not only boost output recovery but will also put the nation on a path of macroeconomic stability,” he noted.