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The uptick in growth was driven mainly by the manufacturing sector which grew 3.40 per cent(year on year) within the period, higher than -1.51 per cent in the fourth quarter (Q4) of 2020 and 0.43 per cent in first quarter (Q1) of 2020.
This indicates that Nigerian factories, especially food and beverage companies, produced more goods in Q1 of 2021 than in Q1 of 2020 or Q4 of the same year .
Generally, the GDP growth rate was slower than the 1.87 per cent reported in Q1 2020, but higher than 0.11 per cent recorded in fourth quarter (Q4) of 2020.
This is a breather for Africa’s most populous nation which saw negative growth rates in the second and third quarters of 2020 due to COVID-19.
In the quarter under review, aggregate GDP stood at N40.014 trillion in nominal terms.
This performance is higher when compared N35.647 trillion reported in the first quarter of 2020, the NBS said.
In the first quarter of 2021, average daily oil production stood at 1.72 million barrels per day (mbpd), 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 in Q4 of 2020.
This means that oil production has dipped in the last 12 months. Analysts attribute this to lower oil demand by the United States, India, China and other countries owing to the pandemic.
Higher production is good news for Nigeria which depends on oil for over 70 per cent of its revenue, said Nonso Ihuoma, an economist.
“It shows oil sector is expanding and higher production could mean uptick in demand in the global market,” he said.
The oil sector recorded real GDP growth rate of –2.21 per cent (year-on-year) in Q1 2021, indicating a decrease
of –7.27 per cent relative to the growth rate recorded in the corresponding quarter of 2020 (5.06 per cent).
The non-oil sector grew by 0.79 per cent in real terms in Q1 2021, which was –0.75 per cent lower compared to the rate recorded in the same quarter of 2020 and -0.89 per cent lower than rates recorded in Q4 of 2020. Growth in the non-oil sector was driven mainly by the information and communication (telecommunication) sector, with other drivers including agriculture (crop production), manufacturing (food, beverage & tobacco), real estate, construction and human health & social services.
While oil sector contributed 9.25 per cent to the Nigerian economy in Q1 of 2021, non-oil sector’s share was 90.75 per cent.
Though the growth in Q1 of 2021 is positive, it is still slow and below the population growth rate of 2.6 per cent. The GDP is a sum of all the economic activities within a period of time. When population growth is higher than GDP growth, the economy is producing high levels of poverty, analysts say.
This is the case with Nigeria with 2.6 per cent population growth rate and cumulatively less than two per cent GDP growth in the last six years.
“It is a slight improvement, but it also means that economic growth is not fast enough to match population growth. This usually means that poverty is spreading,” analyst and manufacturer Ike Ibeabuchi told The ICIR.
“But considering COVID-19 and disruptions in the supply chain since Q2 of 2020, it was expected,” he explained.
About 105 million Nigerians are extremely poor, according to the World Poverty Clock.
Analysts, including the Lagos Chamber of Commerce and Industry (LCCI), are calling for easing or loose monetary police to expand the growth and bail millions out of poverty.
The LCCI said as economic growth was fragile with weak employment levels in the manufacturing and services sector, tightening monetary policy stance would stifle access to credit.