Business & Economy - News - May 23, 2022

Non-oil sector accounts for 93.4% of Nigeria’s GDP, as NBS sees economic stability

By Bassey Udo

Nigeria’s Gross Domestic Product (GDP), which depicts the aggregate value of goods and services in the country’s economy for a period, grew by 3.11 percent (year-on-year) in real terms in the first
quarter of 2022, the National Bureau of Statistics (NBS) has reported.

Contained in the latest Nigerian GDP report for May released on Monday in Abuja, the NBS said the performance showed a sustained positive growth of the country’s economy for sixth consecutive quarter since the negative growth rates recorded in quarter two and three
of 2020.

Following the global economic recession is 2020, the country’s economy contracted after two consecutive declines in GDP growth in the second and third quarters of the year.

In Q2 of 202, the economy declined by about -6.10 percent, with a marginal improvement, but still within the negative zone, to about -3.62 percent in the Q3 of 2020, before rising to about 0.11 percent in the last quarter of the year.

The economy maintained the positive growth trajectory in the first quarter of 2021, recording a further increase to about 0.51 percent growth, before recording the highest leap to about 5.01 percent in the second quarter of 2021.

Although the performance dropped to about 4.03 percent in the third quarter of 2021 and 3.98 percent in fourth, the latest report showed the performance managed to remain in the positive zone, though with a further decline, to 3.11 percent in the first quarter of 2022.

The NBS said the country’s nominal GDP, which stood at about N45.32 trillion, and N17.35 trillion as real GDP, as of May represents an improvement in the country’s economic
performance and an indication of a gradual economic stability.

“This performance is higher when compared to the first quarter of 2021, which recorded aggregate GDP of N40. 02 trillion, indicating a year-on-year nominal growth rate of 13.25 percent. The nominal GDP growth rate in Q1 2022 was higher relative to the 12.25 percent growth recorded in the first quarter of 2021 and higher compared to the 13.11 percent growth recorded in the preceding quarter,” the NBS report said.

In the first quarter 2022, the report said growth rate was higher than the 0.51 percent growth rate recorded in the corresponding quarter in 2021 by about 2.60 percent points and lower than 3.98 percent in the last quarter 2021 by 0.88 percent points.

On a quarter-on-quarter basis, the NBS said real GDP grew negatively at -14.66% in first quarter of 2022 compared to the last quarter of 2021, an indication of a lower economic activity than the preceding quarter.

Oil vs non-oil sectors performance
In terms of the performance of the economy along the broad classification of the oil and non-oil sectors, the report showed the latter out-performed the former.

While the real growth of the oil sector was –26.04 percent (year-on-year) in Q1 2022, a decrease of about 23.83 percent points relative to the rate recorded in the corresponding quarter of 2021, the non-oil sector grew by 6.08 percent in real terms during the corresponding quarter, with a rate higher by 5.28 percent points compared to the rate recorded same quarter of 2021 and 1.34 percent points higher than the fourth quarter of 2021.

Details showed the country realised an average daily crude oil production of 1.49 million barrels per day (mbpd) in the first quarter of 2022, which was lower than the daily average production of 1.72 mbpd recorded in the same quarter
of 2021 by 0.23 mbpd, and lower than the fourth quarter 2021 production volume of 1.50 mbpd by 0.01 mbpd.

Growth in the sector, the NBS said, dropped by 17.99 percent points, when compared to –8.06 percent in Q4 2021.

On a quarterly basis, the NBS said the oil sector grew by 9.11 percent in Q1 2022, contributing about 6.63 percent to the total real GDP in Q1 2022, down from the figures recorded in the corresponding period of 2021, and up compared to the preceding quarter, where it contributed about 9.25 percent and 5.19 percent respectively.

Drivers of sectoral growth

The NBS said the driver of the growth in the non-oil sector in first quarter 2022 was mainly the growth in the performances in the Information and Communication (Telecommunication); Trade; Financial and Insurance (Financial
Institutions); Agriculture (Crop Production); and Manufacturing (Food, Beverage & Tobacco),
accounting for positive GDP growth.

In real terms, the report said the non-oil sector contributed about 93.37 percent to the country GDP in the first quarter of 2022, higher than the 90.75 percent in the first quarter of 2021. The latest figure is lower than the 94.81 percent in the fourth quarter of 2021.

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