Nigeria’s 5.01% GDP growth: Buhari speaks as non-oil sector rises to 6.74%, ICT 17.92%

President Muhammadu Buhari has welcomed Thursday’s Q2 2021 report by the Nigerian Bureau of Statistics (NBS) showing a third consecutive quarter of positive growth of Nigeria’s economy, and the highest quarterly growth in GDP since 2014.

The report

The Gross Domestic Product (GDP) grew by 5.01% in Q2 2021 following 0.51% growth in Q1 2021.

According to the report, the growth was an indication of the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions.

On a quarter-on-quarter basis, the report showed that the real GDP grew at -0.79 percent in Q2 2021 compared to Q1 2021, reflecting a slightly slower economic activity than the preceding quarter due largely to seasonality.

Buhari excited

He said: “This growth, which continues the progress of the preceding two quarters, is a continuing trend reflecting Nigeria’s economic rebound following the COVID-19-induced contractions seen in Q1 and Q2 2020.

“The non-oil sector is a significant contributor to the economic performance in Q2 2021 with growth of 6.74% in real terms, the fastest growth in the sector since the third quarter of 2014. The contribution of the non-oil sector to GDP increased from 91.07% in Q2 2020 to 92.58% in Q2 2021.”

He commended managers of the economy for hard work and commitment, urging them to keep at it till the positive development “touches the lives and pockets of the average Nigerian.”

He listed the main drivers of the Q2 2021 economic growth to include “Trade, Information and Communication (mainly Telecommunications), Transportation, Electricity, Agriculture (Crop Production) and Manufacturing.

“The service sector, specifically, recorded its strongest performance in more than a decade, growing at 9.27%.

“These main growth drivers of this second quarter performance are reflective of the gains from easing restriction of movement locally and internationally, and the improvement in the business and economic environment compared to the same period in 2020.

“The President notes the decline in real growth in the oil sector in Q2 2021, compared to a year ago. Oil production levels were at 1.62million barrels per day, compared to 1.67million barrels per day in Q2 2020. The lower production output as well as the volatility in oil prices since the beginning of the COVID-19 pandemic, is responsible for the decline in performance of the oil sector.”

He assured “that recent reforms and efforts like the conclusion of the Marginal Fields Bid Round, the renewed focus on gas development (including the NLNG Train 7 project, and various pipeline construction projects) as well as the passage and assent to the Petroleum Industry Bill (PIB), are certain to attract new investment to the oil and gas sector, and create conditions for more robust levels of growth in the future.

“It is gratifying to note that the various policies of the administration, aimed at boosting agricultural production, improving the business environment, and investing massively in infrastructure, are beginning to yield fruit. Equally gratifying is the complementary news of the steady decline in the rate of inflation, over the last few months.

“The positive effects of the Economic Sustainability Plan (ESP), which helped fast-track the country’s exit from the COVID-induced recession of 2020, continue to be evident, as some of the sectors driving the Q2 2021 growth have benefited or are benefiting from government-led interventions.

“The successful roll-out of vaccines and COVID-19 protocols has also helped to reduce pressures on the healthcare system and the need for a lockdown,” he said.

Looking to the future, the President assured Nigerians that “there is much to be optimistic about.”

He also assured that the investments in agriculture and infrastructure will continue, as will on-going efforts to achieve a significant improvement in the security situation across the country.

“There is no doubt that a more secure environment – which the security agencies are working hard to achieve – will spur and energize the shoots of economic progress being seen and felt in the country,” the president further  said.

 Economy bouncing back – Expert

In a telephone conversation Thursday, an economist, Friday Efih said the GDP figures were an indication that life was slowly and steadily returning to the economy. 

He said: “With the removal of the COVID-19 restriction and business activities, including foreign travels resuming fully, it was only a matter of time before the economy picked up. 

 “On a quarter-to-quarter basis, the figures show an improvement albeit slower economic activities resulting in slower growth.”

 Efih urged the government to address burning issues of insecurity,  the hostile business environment and its various interventions as these would further boost business activities. 

 “The federal government should as a matter of urgency address the issue of insecurity which has adversely affected the agric sector as many farmers are unable to access their farms. 

“Also, the government should ensure that they monitor the various intervention in order to get the desired result so that it would not be a case of billions of naira gone down the drain,” he said.

About Abdullahi M. Gulloma and Benjamin Umuteme Abuja

View all posts by Abdullahi M. Gulloma and Benjamin Umuteme Abuja →