Nigeria’s Gross Domestic Product (GDP) expanded by 4.03%(year-on-year) in real terms in the third quarter of 2021, showing a sustained positive growth over the last four quarters since the recession witnessed in 2020.
Output contracted by -6.10% and -3.62% in Q2 and Q3 of 2020 under the Covid pandemic.
The Q3 2021 growth rate was higher than the -3.62% growth rate recorded in Q3 2020 by 7.65% points and lower than 5.01% recorded in Q2 2021 by 0.98% points, indicative of a continuous recovery.
Nevertheless, quarter on quarter, real GDP grew at 11.07% in Q3 2021 compared to Q2 2021, reflecting a higher economic activity than the preceding quarter, according to the National Bureau of Statistics (NBS).
The growth in the nation’s Q3’21 output largely reflected sustained recovery in the non-oil sector, which grew 5.44% (versus a 2.51% contraction in Q3’20).
The non-oil sector continues to benefit from a strong rebound in economic activities as COVID-19 worries abate, demonstrated in the growth recorded in sectors such as Manufacturing (+4.29% vs -1.51% in Q3’20), Trade (11.90% vs -12.12% in Q3’20), Transportation (+20.61% vs -42.98% in Q3’20) and Real Estate (+2.32% vs -13.40% in Q3’20), which were battered by the pandemic in Q3’20.
However, the continued upturn in the non-oil sector contrasts with the persistent weakness in the oil sector, which contracted (-10.73%) for a sixth consecutive quarter.
“We link the negative oil sector outturn to weaker domestic oil production, which continues to be hampered by the slowdown in drilling activities and pipeline sabotages. Specifically, we note that operational challenges in August 2021 led to a Force majeure on one of the country’s key oil export terminals – the TransForcados Pipeline (TFP),” analysts at Cardinal Stone Partners said.