The Nigerian economy continued its recovery from the devastating effect of the COVID-19 pandemic. Gross Domestic Product (GDP) figures released by the Nigeria Bureau of Statistics show that the country’s total output grew from 0.51% in the first quarter of 2021 to 5.01% in the second quarter when output from the two quarters are compared with their equivalent quarters in 2020, that is, a year on year (y-o-y) comparison.
Significant improvements in the output from some sectors contributed to the 4.5% change in the overall GDP level, giving the impression that the economy is “picking up steam” according to an upbeat Finance Minister.
4 sectors with the highest growth in 5 years, and the Caveat
Growth figures recorded in the electricity, transport & storage, trade, and water sectors showed notable improvements in Q2 2020. These sectors recorded their highest year on year real growth rate in the last five years.
Electricity, gas, steam, and air conditioning supply grew from 8.66% in Q1 to 78.16% in Q2 (year on year).
The transport and storage sector improved from its -21.89% deficit in Q1 to 76.81% in Q2.
Trade and water sectors also recorded tremendous growth in the second quarter over that of the first quarter. While the trade sector grew from a -2.43% deficit to 22.49%, the water sector grew from 14.75% to 18.48%.
The caveat with these positive growth figures is that they are all comparisons of Q2 2021 with Q2 2020, the second quarter of last year being the period of lockdown due to the COVID 19 pandemic, and a period of lowest economic activities locally and globally.
Actually, when performance in the second quarter of this year (Q2 2021) is compared with that in the first quarter (Q1 2021), there is a drop in the real GDP by -0.79%, indicating a “slightly slower economic activity”, according to the National Bureau of Statistics.
Sectors that declined in Q2 2021 despite comparisons with the Q2 of a Pandemic Year
The information sector was the prominent sector during the COVID-19 outbreak. Attaining a year on year peak growth of 16.52% in Q2 2020. It declined after that in the subsequent quarters. The growth fell to 16.13% in Q3 2020, then to 14.7% in Q4 2020. In the turn of 2021, it further declined to 6.31, and in the second quarter, it was 5.5%.
The performance of the agricultural sector improved after the ease of the lockdown. The sector ended 2020 with a 3.42% growth in the fourth quarter, its highest since 2018. However, the performance of the sector declined consecutively in the first two quarters of 2021. It fell to 2.28% in Q1 and then 1.3% in Q2.
The public sector, finance, insurance sector, and mining & quarrying sector all continued in their deficit percentage change in output. The public sector declined from a -0.88% deficit in Q1 2021 to a -1.68% deficit in Q2 2021.
Finance and insurance declined from -0.46% in Q1 2021 to -2.48% in Q2 2021. And that of mining and quarrying was from -2.19% to -12.29%. The mining and quarrying sector experienced the most significant decline in growth in the second quarter of 2021.
Other essential sector performance showed that the health and manufacturing sectors all enjoyed marginal growths in the second quarter. The health sector grew from 4.65% in the first quarter to 4.95% in the second quarter. Likewise, the manufacturing sector increased from 3.9% in Q1 to 3.49 in Q2.
The performance of the education sector indicates a possible recovery from the effects of COVID-19 lockdown. The sector pulled out of the deficit that trailed it from the second quarter of 2020 to 2021. The education sector recorded a growth rate of -6.2% in Q1 2021 to 0.63% in Q2.
The non-oil sector continued to improve as it grew from 0.79% in the first quarter to 6.74% in the second quarter. And despite the overall growth recorded, the oil sector declined from -2.21% in the first quarter to -12.65% in the second quarter.