According to the National Bureau of Statistics [NBS], Nigeria’s GDP grew by 3.40% in 2021, year on year. This marks the highest GDP growth rate since 2015. This growth performance is higher than projections by the IMF (2.6%) and the World Bank (2.7%). The quarterly GDP figures indicates that the economy grew by 3.98% in the fourth quarter of 2021. This was also the fifth consecutive quarterly GDP growth recorded in the economy.

The sectoral disaggregation of the annual GDP data indicates that the following sectors and subsectors recorded positive growth: the rail transport (36.95%), air transport (19.70%), road transport (17.13%), financial institution (10.53%), insurance (6.24%), Trade (8.62%), cement production (6.64%), chemical and pharmaceuticals (8.13%), food and beverage (5.73%), motor vehicles and assembly (4.23%), construction (3.09%), ICT (7.28%), real estate (2.26%). These growth performances were a reflection of the progressive recovery from the shocks of the pandemic and the rebound of economic activities in these sectors.

However, some sectors contracted.  These include oil refining which contracted (47.94%), crude oil production (8.3%), textiles and apparels (1.27%), wood and wood products (1.54%), pulp and paper industry (0.32%), accommodation and food services (0.45%).

It is instructive that the biggest contraction was in the oil and gas sector.  These figures are indicative of the weak sectoral performance on account of the collapse of domestic petroleum refineries, crude oil theft, inappropriate policy environment, stifling regulatory environment and dwindling investors confidence.

THE KEY GROWTH DRIVERS:

The following were the key drivers of the growth performance recorded in the 2021 GDP:

  1. There is a strong base effect resulting from the fact that 2020 [the reference year] was a year of recession. In other words, being a year and year comparative analysis, comparing 2021 with 2020 naturally resulted in a strong improvement in comparative performance. 2020 was the peak of the covid pandemic and the associated disruptions in the economy. The year ended with an output contraction of 1.8%.  
  2. The rebound of economic and business activities across all sectors of the economy as the pandemic effects progressively dissipates.     There was a relaxation of restrictions, lockdowns and reduction in the supply chain disruptions. These naturally impacted on domestic economic activities and global economic recovery.
  3. There was an aggressive rollout of vaccines in 2021 especially in the advanced economies which significantly boosted the sentiments of investors globally. This of course boosted investment and consequential growth both domestically and globally.   
  4. Rebound in crude oil price: being an oil producing country the rebound of crude oil price in 2021 impacted positively on growth performance. Average crude oil price was $70/barrel in 2021 as against $42/barrel in 2020. Historically, there is a strong and positive correlation between oil price and economic growth in the Nigerian economy. The rebound of oil price was a key driver of 2021 growth.
  5. Economic Stimulus: the economic stimulus programme of the government, encapsulated in the Economic Sustainability Plan also played a role in accelerating the recovery of the economy in 2021. The government introduced quite a number of interventions which impacted positively on those who benefitted from those interventions. Projected spending under the stimulus plan was N2.3 trillion. 

Download file below to read more: