Nigeria’s GDP Grows by 3.98 Percent in the Fourth Quarter of 2021
Economic fundamentals in Africa’s largest economy Nigeria improved in recent months, according to the latest reports from the National Bureau of Statistics (NBS).
Nigeria’s Gross Domestic Product (GDP) grew by 3.98 percent (year-on-year) in real terms in the fourth quarter (Q4) of 2021, indicating sustained growth for the fifth quarter since the 2020 recession when pandemic grounded business activities.
The growth was 3.87 percent points higher than the 0.11 percent recorded in Q4 2020 and lower than 4.03 percent achieved in Q3 2021. Annually, the Nigerian economy grew by 3.40 percent in 2021.
On a quarterly basis, the real GDP expanded by 9.63 percent in the fourth of 2021 when compared to the third quarter of the same year.
In the fourth quarter, Nigeria’s aggregate GDP stood at N49,276,018.23 million in nominal terms. This performance is higher when compared to the fourth quarter of 2020 which recorded aggregate GDP of N43,564,006.29 million, indicating a year-on-year nominal growth rate of 13.11 percent.
The nominal GDP growth rate in Q4 2021 was higher relative to 10.07 percent growth recorded in the fourth quarter of 2020 but lower compared to 15.41 percent growth recorded in the preceding quarter. 2021 annual nominal growth stood at 13.92 percent. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors.
The nation in the fourth quarter of 2021 recorded an average daily oil production of 1.50 million barrels per day (mbpd), lower than the daily average production of 1.56mbpd recorded in the same quarter of 2020 by 0.06mbpd and lower than the third quarter 2021 production volume of 1.57mbpd by 0.07mbpd.
Real growth of the oil sector was –8.06% (year-on-year) in Q4 2021 indicating an increase by 11.71 percent points relative to rate recorded in the corresponding quarter of 2020. Growth increased by 2.68 percent points when compared to Q3 2021 which was –10.73 percent.
Quarter-on-Quarter, the oil sector recorded a growth rate of -24.06 percent in Q4 2021. Annual growth stood at -8.30 percent, a rate better than the -8.89 percent recorded in 2020. The Oil sector contributed 5.19 percent to total real GDP in Q4 2021, down from figures recorded in the corresponding period of 2020 and down compared to the preceding quarter, where it contributed 5.87 percent and 7.49 percent, respectively. Nevertheless, the sector contributed 7.24 percent to real GDP in 2021.
The non-oil sector grew by 4.73 percent in real terms during the reference quarter (Q4 2021). This rate was higher by 3.05 percent point compared to the rate recorded same quarter of 2020 and 0.71 percent point lower than the third quarter of 2021. This sector was driven in the fourth quarter of 2021 mainly by Agriculture (crop production); trade; Information and Communication (Telecommunication); and Financial and Insurance (Financial Institutions), accounting for positive GDP growth.
In real terms, the NonOil sector contributed 94.81 percent to the nation’s GDP in fourth quarter 2021, higher from share recorded in the fourth quarter of 2020 which was 94.13 percent and higher than the third quarter of 2021 recorded as 92.51 percent. The annual contribution in 2021 was 92.76 percent.
Nigeria Spends N16.126 Billion Daily on Petrol Subsidy
Nigeria’s daily consumption of Premium Motor Spirit (PMS) commonly known as petrol has risen to 80 million litres, according to the latest data from the Nigerian Petroleum Company Limited (NNPCL).
A breakdown of the data showed that 558.83 million litres of petrol were evacuated between March 4 and 10, 2023, translating to an average daily consumption of 79.83 million litres.
In February 2023, the Group Chief Executive, NNPCL, Mele Kyari had put petrol consumption at around 66 million litres of petrol and declared that the corporation was spending about N202 on every litre of PMS consumed across the country.
“Today, by law and the provisions of the Appropriation Act, there is a subsidy on the supply of petroleum products, particularly PMS imports into our country. In current data terms, three days ago, the landing cost was around N315/litre.
“Our customers are here; we are transferring to each of them at N113/litre. That means there is a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400bn of subsidy every month,” the GCEO had stated.
Therefore, going by Kyari’s estimation that Nigeria spent N202 a litre as a subsidy will put Nigeria’s daily petrol subsidy cost at N16.126 billion and N483.769 billion per month.
However, the national petroleum corporation has been lamenting the huge resource spent on subsidizing fuel when the majority of people benefiting from it are a few criminals smuggling it to neighbouring countries.
NNPCL explained the danger of the continued practice on the corporation’s cash flow, adding that the funding had been ongoing without refunds from the Federal Ministry of Finance, Budget and National Planning, despite the fact that subsidy had been budgeted for in the Appropriation Act.
“But there is a budget provision for it (subsidy). Our country has decided to do this. So, we are happy to deliver this, but it is also a drain on our cash flow, and I must emphasize this.
“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash flow of the company when you do not get refunds from the Ministry of Finance,” Kyari had stated in Abuja.
Scarcity of Fuel and Naira Set to Plunge Over 28 Million Nigerians into Crisis
A latest report by Cadre Harmonise has revealed that over 28.4 million Nigerians in 26 states and the Federal Capital Territory are expected to face severe crises between June and August this year due to the scarcity of fuel and naira.
This projection includes 18,000 Internally Displaced Persons (IDPs).
Cadre Harmonise is a tool developed as an early warning system to prevent and manage food and nutrition crises in Nigeria.
The report was released in Abuja on Thursday, covering 26 states in Nigeria. It was also stated that about 17.7 million people, including 14,000 IDPs in 26 states and the FCT, were already in crisis or worse by May 2023.
The report pointed out that the naira redesign was one of the major drivers of the crisis in Nigeria, as the withdrawal of old naira notes from circulation created a serious bottleneck to households’ ability to access cash and food commodities.
The prolonged scarcity of Petroleum Motor Spirit commonly called petrol, and the associated hike in the pump price of the commodity across the states led to an astronomical rise in transport fares and cost of food products in Nigerian markets.
The report also highlighted the consistent rise in the price of food commodities and agricultural inputs across Nigerian markets as a major driver of food insecurity. For instance, the consumer price index, which measures inflation, grew from 15.7 percent in February 2022 to 21.9 percent in February 2023 (that is a 39.49 percent point increase) year-on-year.
Insecurity, especially insurgency in the North-East states, particularly in Borno, Adamawa, and Yobe, was also identified as a persistent challenge in the report.
The Cadre Harmonise report was produced with technical and financial support from global, regional, and national partners including the United Nations Food and Agriculture Organisation, World Food Programme, Save the Children, UNICEF, Mercy Corps, among others.
Cash Crunch, Economic Uncertainty Bolster Inflation Rate to 21.91% in February – NBS
Nigeria’s inflation rate continues to upward trend in February as economic uncertainty amid a chronic cash crunch crippled economic activities.
The Consumer Price Index (CPI), which measures the inflation rate, grew at 21.91% rate in the month of February, a 0.09% increase from 21.82% recorded in January, the National Bureau of Statistics (NBS) stated.
On a yearly basis, the inflation rate was 6.21% higher than the 15.70% filed in February of 2022.
According to the NBS, the headline inflation was bolstered by Bread and Cereal (21.67%), Actual and Imputed Rent (7.74%), Potatoes, Yam and Other Tubers (6.06%), Vegetable (5.44%) and Meat (4.78%).
On a monthly basis, inflation moderated by 0.16% in the month under review to 1.71% when compared to 1.87% reported in January 2023. Indicating that in February 2023 price level was 0.16% lower relative to January 2023.
The percentage change in the average CPI for the twelve months period ending February 2023 over the average of the CPI for the previous twelve months period was 19.87%, showing a 3.15% points increase compared to 16.73% recorded in February 2022.
Nigeria’s food inflation rate grew at a whopping 24.35% rate on a year-on-year basis in February 2023 as a few money continues to chase limited food items due to the nation’s new bank policy that made it impossible for people to access their deposited money in the bank.
This was 7.24% points higher when compared to the 17.11% recorded in February 2022. The rise in food inflation according to NBS was caused by increases in prices of Oil and Fat, Bread and Cereals, Potatoes, Yam and Other Tubers, Fish, Fruits, Meat, Vegetable, and Food Product etc.
On a monthly basis, the food inflation rate was 1.90% in February 2023, representing a 0.18% increase from 2.08% in January 2023.
However, the average annual rate of food inflation for the twelve-month ending February 2023 over the previous twelve-month average was 22.12%, which was a 2.44% points increase from the average annual rate of change recorded in February 2022 (19.69%).
News2 weeks ago
Npower Pays November, December Stipends; Gives Update on Next Step
News4 weeks ago
Npower Batch C2 Beneficiaries to Finally Receive 3 Months Stipends
Technology3 weeks ago
Africa Emerges as The Worst Performing Region in Internet Value
Cryptocurrency2 weeks ago
90 Million People Use Cryptocurrency in Nigeria – Report
Fintech2 weeks ago
Nigerians Turn to Digital Banks as Traditional Banking Apps Face Challenges
Crude Oil4 weeks ago
Oil Prices Stabilize Amidst Russian Supply Cuts and U.S. Inventory Rise
Black Market Rate4 weeks ago
Dollar To Naira Exchange Rate For Today 22nd February 2023
Crude Oil4 weeks ago
Nigerian Government Revives Shut-In Oil Wells to Boost Production