Nigeria’s Gross Domestic Product (GDP) grew by 5.01% (year-on-year) in real terms in the second quarter of 2021, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.
The Q2 2021 growth rate was higher than the -6.10% growth rate recorded in Q2 2020 and the 0.51% recorded in Q1 2021 year on year, indicating the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions.
The steady recovery observed since the end of 2020, with the gradual return of commercial activity as well as local and international travel, accounted for the significant increase in growth performance relative to the second quarter of 2020 when nationwide restrictions took effect.
Year to date, real GDP grew 2.70% in 2021 compared to -2.18% for the first half of 2020. Nevertheless, quarter on quarter, real GDP grew at -0.79% in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.
In the quarter under review, aggregate GDP stood at N39,123,713.32 million in nominal terms, higher than the second quarter of 2020 with aggregate GDP of N34,023,197.60 million, indicating a year on year nominal growth rate of 14.99%.
The nominal GDP growth rate in Q2 2021 was higher than -2.80% growth recorded in the second quarter of 2020 when economic activities slowed sharply at the outset of the pandemic.
The Q2 2021 nominal growth rate was also higher than 12.25% growth recorded in Q1 2021. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors (Figure 1).
The Oil Sector
In the second quarter of 2021, average daily oil production stood at 1.61 million barrels per day (mbpd), which is -0.19mbpd lower than the average daily production of 1.81mbpd recorded in the same quarter of 2020 and -0.10mbpd lower than the 1.72mbpd recorded in the first quarter of 2021 (Figure2).
Figure 2: Crude Oil Output (MBPD)
Real growth of the oil sector was -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%.
For the first half of 2021, real GDP was recorded at -7.13%, compared to -0.80% for the first half of 2020, the performance reflecting lower oil output.
Quarter-on-quarter, the oil sector recorded a growth rate of -20.35% in Q2 2021.
The sector contributed 7.42% to total real GDP in Q2 2021, down from figures recorded in the corresponding period of 2020 and down compared to the preceding quarter, where it contributed 8.93% and 9.25% respectively.
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% points compared to the rate recorded in the same quarter of 2020 and 5.95% points higher than the first quarter of 2021.
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), reflecting the easing of movement, business and economic activity across the country relative to the same period a year earlier.
In real terms, 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%.