Nigeria Exits Economic Recession by 0.11% Rise in Q4 Real GDP

A protestor sports a an anti-corruption T-shirt on January 9, 2012 in Lagos during a demonstration against the more than doubling of petrol prices after government abolished fuel subsidies. Thousands of people heeded the unions' call to stage protest rallies across Africa's most populous country. Police shot dead a protester in Nigeria's commercial capital Lagos on January 9 during a national strike over fuel prices. AFP PHOTO / PIUS UTOMI EKPEI (Photo credit should read PIUS UTOMI EKPEI/AFP/Getty Images)

In the last quarter of 2020, Nigeria exited its recession having printed a year-on-year (y-o-y) real output growth rate of 0.11% to N19.55 trillion (or USD122.44 billion) as lock down measures were significantly eased, allowing households and business to resume economic activities; and in spite of the anti-SARS protests in several parts of the country.

This is in addition to the several billions of Naira in economic stimulus packages provided by the monetary and fiscal authorities to help households and businesses cope with the ravaging effect of COVID-19.

Sector-wise, the exit was propelled essentially by a 1.69% growth in non-oil sector; with the Information & Communication, Agricultural and Real Estate sectors registering the biggest growth rates of 14.95%, 3.42% and 2.81% respectively.

The oil & gas sector, however, saw a 19.76% y-o-y decline in real output to N1.15 trillion (or USD7.63 billion) as average daily oil production fell quarter-on-quarter (q-o-q) by 6.6% to 1.56 million barrels per day (mbpd) amid production cuts imposed by Opec+.

For full year 2020, real GDP declined y-o-y by 1.92% to N70.01 trillion (or USD465.85 billion); with the non-oil sector moderating by 1.25% to N64.30 trillion (or USD427.82 billion) and the oil & gas sector plunging by 8.89% to N5.7 trillion (or USD38.01 billion).

Information & Communication and Financial services sectors saw the biggest annual growth rates of 13.18% and 9.37% respectively while the Agricultural sector, the biggest contributor to real GDP at 26.31%, grew by 2.17%.

In line with our expectation, Nigeria’s economy remains well on track to see a convincing recovery amid return to economic activities, the administration of the COVID-19 vaccine, strong crude oil prices and the numerous stimulus packages.

We nevertheless expect the Nigerian authorities to take necessary measures to strengthen the fragile recovery.