Direct data on the performance of Nigeria’s gross domestic product (GDP) and aggregate demand for the first quarter (Q1) of 2021 are not yet available, but indirect data suggests improvements in February and stronger quarterly outcomes for the rest of 2021.
The Central Bank of Nigeria (CBN) report showed that both the manufacturing and non-manufacturing Purchasing Managers Index (PMIs) increased to 48.70 index points in February 2021, compared with 44.9 and 43.3 index points respectively in January 2021.
Also, the recent expansion in both exports and imports are signals for a better performance of the economy in 2021.
“In balance, economic activity on the domestic front has been improving gradually in the past few months despite the rise in inflation which as earlier noted, reflect the temporary effect of supply-side fluctuations. The increase in bank lending is providing the desired impact in bolstering aggregate demand and economic recovery,” Asogwa, Robert Chikwendu, a member of the CBN’s monetary Policy Committee (MPC), said.
Nigeria’s GDP expanded by 1.87 percent in Q1, 2020. This performance was recorded against the backdrop of significant global disruptions resulting from the COVID-19 public health crisis, a sharp fall in oil prices and restricted international trade.
In the fourth quarter of 2020, GDP expanded by 0.11 percent.
The National Bureau of Statistics (NBS) is set to release Q1, 2021, GDP figures on May 24, 2021.
The CBN’s Purchasing Managers Indices (PMIs) suggests that there are improvements in both manufacturing and non-manufacturing activities between January 2021 and February 2021.
For instance, the Manufacturing PMI increased from 44.9 in January 2021 to 48.7 index points in February 2021.
The Non-Manufacturing PMI, which stood at 43.3 in January 2021, increased to 48.7 index points in February 2021. These increases in the PMIs reflect increased economic activities as the COVID-19 restrictions were eased, as well as increases in client demand and sales.
Unfortunately, despite the relative improvement in the growth outlook in the fourth quarter of 2020, weakness in the labour market has persisted as unemployment rose to 33.3 percent in the fourth quarter of 2020 from 23.1 percent in the second quarter of 2020.
The CBN however notes that, a confluence of recent factors including the growth in private investment and government expenditure may imply that unemployment conditions on the margin may have improved somewhat since the beginning of 2021.