Africa’s largest economy, Nigeria recorded an impressive 4.03% year-on-year growth in the third quarter (Q3) of 2021 after posting 5.01% in the second quarter, according to the latest data released by the Bureau. National Statistics (NBS) on Friday.
Despite the high inflation rate and a series of weak economic fundamentals, Nigeria is showing strong resilience, especially from the peak of COVID-19 when the gross domestic product (GDP) contracted by 6, 10% and 3.62% in the second and third quarters of 2020, respectively.
The economy has since rebounded from the recession with growth rates of 0.11%, 0.51%, 5.01% and 4.03% in the fourth quarter of 2020, the first quarter of 2021, the second quarter of 2021 and the third quarter 2021, respectively. Aggregate GDP reached 45,113 trillion naira in nominal terms, representing a growth rate of 15.41% year-on-year compared to the 39,089 billion naira reached in the third quarter of 2020.
To better understand Nigeria’s economic makeup, it is important to consider productivity in both the oil and non-oil sectors.
Nigeria’s crude oil production averaged 1.57 million barrels per day (mbpd) in the third quarter, lower than the average daily production of 1.67 mbpd achieved in the same quarter of 2020, but the country has generated more revenue in the third quarter of 2021 given the sharp increase in oil prices in 2021.
The petroleum sector recorded real growth of -10.73% year-on-year in the quarter under review, an increase of 3.16 points compared to the rate recorded in the corresponding quarter of 2020. Growth increased by 1. 92% compared to the second quarter of 2021 which was -12.65 percent.
On a quarterly basis, the oil sector recorded a growth rate of 12.05% in the quarter under review, while the sector contributed 7.49% to total real GDP, down from the figures recorded during of the corresponding period of 2020 and up from the previous quarter, where it contributed 8.73 percent and 7.42 percent, respectively.
The non-oil sector
The non-oil sector, Nigeria’s largest growing sector, grew 5.44% in real terms in the third quarter of 2021. This rate was 7.95% higher than the rate recorded in the same quarter of 2020 and lower by 1.30% compared to the second quarter of 2021.
The sector has been largely driven by commerce, information and communication (telecommunications); other drivers include finance and insurance (financial institutions); Manufacturing (food, beverages and tobacco); Agriculture (crop production); and transport and storage (road transport), which represents positive GDP growth.
In real terms, the non-oil sector contributed 92.51% to Nigeria’s GDP in the third quarter of 2021, lower than the 92.58% recorded in the second quarter of 2021 and higher than the 91.27% recorded in the third quarter of 2020.