Africa’s largest economy Nigeria grew at an impressive 4.03 percent rate year-on-year in the third quarter (Q3) of 2021 after posting 5.01 percent in the second quarter, according to the latest data published by the National Bureau of Statistics (NBS) on Friday.
Despite the high inflation rate and a series of weak economic fundamentals, Nigeria is showing strong resilience, especially when compared to the peak of COVID-19 when Gross Domestic Product (GDP) contracted by 6.10 percent and 3.62 percent in the second and third quarter of 2020, respectively.
The economy has since rebounded from recession with 0.11 percent, 0.51 percent, 5.01 percent and 4.03 percent growth rates in Q4 2020, Q1 2021, Q2 2021 and Q3 2021, respectively. Aggregate GDP rose to N45.113 trillion in nominal terms, representing a 15.41 percent year-on-year growth rate from N39.089 trillion achieved in the third quarter of 2020.
To better understand Nigerian economic composition, it is important to take into consideration productivity in the oil and non-oil sectors.
Nigeria’s crude oil production stood at 1.57 million barrels per day (mbpd) on average in the third quarter, lower than the daily average production of 1.67 mbpd achieved in the same quarter of 2020 but the country generated more revenue in Q3 2021 given the surged in oil prices in 2021.
Oil sector recorded -10.73 percent year-on-year real growth in the quarter under review, an increase of 3.16 percent points relative to the rate recorded in the corresponding quarter of 2020. Growth increased by 1.92 percent when compared to Q2 2021 which was –12.65 percent.
On a quarterly basis, the oil sector recorded a growth rate of 12.05 percent the quarter under review, while the sector contributed 7.49 percent to total real GDP, down from figures recorded in the corresponding period of 2020 and up compared to the preceding quarter, where it contributed 8.73 percent and 7.42 percent, respectively.
The non-oil sector, Nigeria’s largest growing sector, grew by 5.44 percent in real terms in the third quarter of 2021. This rate was 7.95 percent higher than the rate recorded in the same quarter of 2020 and 1.30 percent lower than the second quarter of 2021.
The sector was largely driven by trade, Information and Communication (Telecommunication); other drivers include Financial and Insurance (Financial Institutions); Manufacturing (Food, Beverage & Tobacco); Agriculture (Crop Production); and Transportation and Storage (Road Transport), accounting for positive GDP growth.
In real terms, the Non-Oil sector contributed 92.51 percent to Nigeria’s GDP in the third quarter of 2021, lower than the 92.58 percent recorded in the second quarter of 2021 and higher than 91.27 percent posted in Q3 2020.