The Nigerian economy took a turn for the better as it recorded its first growth since the Coronavirus Disease hit the world, as Gross Domestic Product grew by 0.11 per cent in the last quarter of last year.
According to latest GDP figures released by the National Bureau of Statistics, real GDP grew by 0.11 per cent Year-on-Year, while it contracted by 1.92 per cent for the 2020 full year. In the third quarter of 2020, the GDP figure was -3.62 per cent while the Q4 2019 figure was 2.55 per cent.
Breakdown of the GDP figures saw the oil sector in the woods, contracting by 19.76 per cent compared to growth of 6.36 per cent in Q4 19. According to NBS, crude oil production averaged 1.56mb/d in Q4 20, 22 per cent lower than Q4 19. The oil sector contributed 5.87 per cent to total GDP compared to 7.3 per cent in Q4 19.
Similarly, the non-oil sector grew slower by 1.69 per cent in Q4 20 compared to Q4 19 figure of 2.26 per cent as its contribution to total GDP improved. Non-oil contribution to GDP stood at 94.13 per cent in Q4 20 compared to 92.68 per cent and 91.30 per cent in Q4 19 and Q3 20 respectively.
Analysing the breakdown of three of the most significant components of the GDP: agriculture grew stronger by 3.42 per cent compared to 1.39 per cent in Q3 20; industries contracted further by 7.30 per cent compared to -6.12 per cent in Q3 20; while services grew by 1.39 per cent against -5.49 per cent in Q3 20.
In terms of contribution, services, agriculture, and industries accounted for 54.28, 26.95, and 18.77 per cent respectively of overall output growth.
The positive turnaround of the GDP figures came as a surprise to many analysts.
Commenting on the latest GDP figures, former Director General of the West African Institute for Financial and Economic Management, Professor Akpan Ekpo, noted that the growth recorded was rather too sluggish.
To him, the growth recorded is still far less than the growth in population. However, Head of Research at United Capital, Wale Olusi, argued that since the country was not in a normal period, economic growth could not be compared to population growth.
For Olusi, the improvement in GDP figures did not come as a surprise.
His words, “We expected that Q4 number would be an improvement from the -3 per cent we had in Q3 and then we also expected that the full year number will be negative GDP growth Y-o-Y.
“It broadly mirrors the reopening of the economy that we saw in Q4 of last year as well as increase in economic activities in the quarter which ultimately moderated the impact of the lockdown that we saw in April, May and June. Hence the rather moderate negative growth for the year as a whole. Also, in December, there were festivities, which supported economic activities and the recovery itself.”
For Ekpo, the growth recorded still reflected an economy in a bad shape.
“When you look at the figures again, the oil sector contracted; so it is not doing well and the non-oil sector is also not doing well. So, we just barely escaped the contraction in the Q4 because of increased government spending on the economy.”
To ensure that the country sees the kind of growth it expects in the post-COVID-19 era, he said, “All these hike in petrol prices and tariff have to wait, and since the oil price is going up, it means government is getting more revenue so they should use that revenue.”