SECOND QUARTER 2021 GROSS DOMESTIC PRODUCT (GDP) REPORT
The National Bureau of Statistics has released the national accounts for Q2 2021 showing that GDP grew by 5.0% y/y compared with 0.5% recorded in Q1 2021. This is a strong and a more desirable growth when we look at the non-oil growth of 6.7 percent y/y compared with the 0.79 percent in Q1. This shows an increase in non-oil sector activities through growth in Trade, Information and Communication (Telecommunication), Transportation (Road Transport),
Electricity, Agriculture (Crop Production) and Manufacturing (Food, Beverage & Tobacco).
The loss of jobs due to the negative effects of the pandemic may have driven more people into the retail trade, commerce, and logistics. The positive growth in the transport subsectors like road and rail transport may have also had some positive impact on trade with the easing of movement. This is also evident that the Nigerian economy is recovering fast and sustained by the reduction in supply chain disruptions especially as there was no serious lockdown on economic activities in the second quarter. The Economist Magazine’s ranking of global recoveries ranked Nigeria at 4th position in the world as at end of 2020. The easing of movement has supported the increase in economic activities across the country where we still experience serious security challenges.
With this Q2 performance and if this is sustained, the growth projections for Nigeria will be reviewed upwards in the coming weeks. However, we must watch and respond appropriately to the major threats to this growth performance like the third wave of COVID-19 infections that could lead to restrictions of movement, the rising spate of insurgency, banditry, kidnapping, and the persistent farmer/herder conflicts.
The contraction in ICT growth in Q2 is simply a base effect factor when you look at the positive growth in Q2 compared to what was recorded in preceding quarters especially in 2020. The Information and Communication Sector grew by 5.50% in Q2 2021 from 6.31% in Q1 2021 and 16.52% in Q2 2020. The concentration on the use of ICT during the lockdown periods of 2020 recorded a double-digit growth rate. Since this year we have recorded single-digit because the use concentration may have slightly reduced especially as comparatively fewer people work from home against what was obtained in 2020.