Nigeria, Africa’s largest economy, grew by 0.51 percent year-on-year in the first quarter (Q1) of 2021, according to the latest report from the National Bureau of Statistics (NBS).
The economy has now expanded for two consecutive quarters following the negative growths recorded in the second and third quarters of 2020.
The first quarter (Q1) 2021 growth rate was slower than the 1.87 percent filed in Q1 2020 but higher than 0.11 percent posted in the fourth quarter of 2020. Suggesting a slow but continuous growth.
On a quarterly basis, the real GDP expanded by 13.93 percent in Q1 2021 when compared to Q4 2020, indicating a broad slow pace of economic activities at the start of the year.
In the quarter under review, aggregate GDP stood at N40,014,482.74 million in nominal terms. This performance is higher when compared to the first quarter of 2020 which recorded aggregate GDP of N35,647,406.08 million, indicating a year-on-year nominal growth rate of 12.25 percent.
The nominal GDP growth rate in Q1 2021 was higher relative to 12.01 percent growth recorded in the first quarter of 2020 as well as the 10.07 percent growth recorded in the preceding quarter. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors.
In the first quarter of 2021, average daily oil production stood at 1.72 million barrels per day (mbpd), or 0.35mbpd lower than the average daily production of 2.07mbpd recorded in the same quarter of 2020 but higher than the production volume of 1.56mbpd recorded in the fourth quarter of 2020.
The oil sector recorded real GDP growth rate of –2.21 percent (year-on-year) in Q1 2021 indicating a decrease of –7.27 percent points relative to the growth rate recorded in the corresponding quarter of 2020 (5.06 percent). Compared to Q4 2020 which recorded –19.76 percent growth rate, growth in Q1 2021 was higher by 17.55 percent points.
Quarter-on-quarter, the oil sector recorded a growth rate of 35.65 percent in Q1 2021. In terms of contribution to aggregate GDP, the Oil sector accounted for 9.25 percent of aggregate real GDP in Q1 2021, slightly lower than 9.5 percent recorded in the corresponding period of 2020 but higher than in the preceding quarter, where it contributed 5.87 percent.
The non-oil sector grew by 0.79 percent in real terms in Q1 2021, which was –0.75 percent points lower compared to the rate recorded in the same quarter of 2020 and -0.89 percent points lower than rates recorded in the fourth quarter of 2020. Growth in the non-oil sector was driven mainly by the Information and Communication (Telecommunication) sector while other drivers include Agriculture (Crop Production); Manufacturing (Food, Beverage & Tobacco); Real Estate; Construction and Human Health & Social Services.
In real terms, the Non-oil sector accounted for 90.75 percent of aggregate GDP in the first quarter of 2021, higher than its share in the first quarter of 2020 which was 90.50 percent but lower than 94.13 percent recorded in the fourth quarter of 2020.
Kenya Receives $750 Million Loan from World Bank to Boost Economic Recovery
Kenya has received a $750 million loan from the World Bank to support its budget and help the East African economy recover from the effects of the COVID-19 pandemic, the multilateral lender said on Friday.
The Kenyan government has been pushing hard to secure foreign funding to fill a wide budget deficit before its financial year closes at the end of this month.
The $750 million disbursement is part of World Bank’s Development Policy Operations (DPO), which lends cash for budget support instead of financing specific projects.
The bank said some of the funds would go towards setting up an electronic procurement system for government goods and services to improve transparency.
The World Bank said the concessional loan will have a 3.1% annual interest rate. Typically, World Bank loans have zero or very low interest rates and have repayment periods of 25 to 40 years, with a five- or 10-year grace period.
On Thursday, Finance Minister Ukur Yatani presented to parliament the 2021/22 budget, with a deficit of 7.5% of gross domestic product, reduced from 8.7% for the current fiscal year ending this month.
The finance ministry forecasts a economic growth of 6.6% this year, recovering from 0.6% in 2020 when sectors like tourism and related services collapsed due to restrictions imposed to curb the spread of COVID-19.
The World Bank forecasts Kenya’s economy will grow 4.5% this year, and 4.7% in 2022.
President Uhuru Kenyatta, who took the helm in 2013, has overseen a jump in public borrowing. Total debt stands at 70% of GDP, up from about 45% when he took over – a surge that some politicians and economists say is saddling future generations with too much debt.
The government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.
FG Spends N612.7 Billion on Domestic Debt Servicing in Q1 2021
The latest report from the Debt Management Office (DMO) has revealed that the Federal Government spent a total sum of N612.71 billion on domestic debt servicing in the first quarter (Q1) of 2021.
In the report released on Wednesday, the DMO said the Federal Government paid holders of mature Nigerian Treasury Bills (NTB) N17.23 billion in January, N12.3 billion in February and N5.49 billion in March 2021. Indicating that the Federal Government paid a combined sum of N35.03 billion to NTB holders in Q1 2021.
Similarly, the Federal Government paid N537.783 billion to holders of Federal Government of Nigeria bonds in three instalments of N201.95 billion in January, N79.26 billion in February and N256.58 billion in March 2021.
The Federal Government also paid N308.38 million in three tranches to subscribers of mature FGN Savings Bond. FG paid N111.65 million in January, N97.074 million in February and N99.65 million in March 2021.
Another N8.16 billion was used to settle FGN Sukuk Rentals in March 2021. No payment was made in January and February 2021.
The Federal Government released N31.44 billion as principal repayment “in respect of promissory notes during the quarter under review.
A monthly breakdown revealed that a total sum of N219.29 billion was released to service domestic debts in January, N123.09 billion in February and N270.33 billion in March. Therefore, bringing the total amount spent on domestic debt servicing in the first quarter of 2021 to N612.71 billion.
Nigeria’s total debt rose to N33.1 trillion in the first quarter of 2021, according to the report released by the DMO.
Togo, Niger, Others to Acquire Nigeria’s Idle Electricity
Four West African nations are collaborating to acquire unutilised power produced in Nigeria, stated Sule Abdulaziz, the Chairman of the Executive Board of the West African Power Pool (WAPP).
Abdulaziz, who doubled as the acting Managing Director of the Transmission Company of Nigeria, listed the four West African nations as Niger, Togo, Benin and Burkina Faso.
He said the nations were collaborating to make the purchase via the Northcore Power Transmission Line presently under construction.
Abdulaziz disclosed this at the WAPP meeting held on Wednesday in Abuja.
He said, “The power we will be selling is the power that is not needed in Nigeria.
“The electricity generators that are going to supply power to this transmission line are going to generate that power specifically for this project. So, it is unutilised power.”
The WAPP chairman said the country was expecting new generators to take part in the energy export for the 875km 330KV Northcore transmission line from Nigeria through Niger, Togo, Benin to Burkina Faso.
Abdulaziz said, “In addition, there are some communities that are under the line route, about 611 of them, which will be getting power so that there won’t be just a transmission line passing without impact.”
He further stated that the project, financed by the World Bank, French Development Council and the African Development Bank, had recorded progress, saying that the energy ministers would be addressing security issues for the project at another meeting in Abuja.
He added that “Nigeria has the greatest advantage among these countries because the electricity is going to be exported from Nigerian Gencos (generation companies).”
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