The country’s Gross Domestic Product (GDP), released by the National Bureau of Statistics (NBS) showed annualised real growth of 3.4 per cent, the highest in the life of the administration of President Muhammadu Buhari.
It was also the second time national economic output would exceed the 2.6 per cent average population growth rate, a development Bismarck Rewane, an economist, described as commendable.
In the second quarter (Q2) of 2021, the real GDP hit 5.01 per cent, the highest quarterly growth in recent years. Thereafter, the trend started flattening as the country recorded 4.01 per cent in the third quarter (Q3). The Q4 data show that the growth momentum may have been on a downtrend (otherwise interpreted as a slower growth) with the average performance of the economy pegged at 3.98 per cent.
Overall, both Q4 and full-year performances were driven by impressive growth in the service sector. For instance, financial institutions, trade and telecommunication posted growth ranging from 7.28 and 10.53 per cent.
The shared input of financial institutions, trade and telecommunications was 31.1 per cent or N22.83 trillion. The entire service sector of the economy contributed 53.56 per cent while the agriculture and industrial sectors added 25.88 per cent and 20.56 per cent respectively.
Reacting to the report, Chief Executive Officer of the Centre for Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said it was cheering to hear that the economy is picking up after the COVID disruption.
“The positive trajectory concerning our GDP is not unconnected with the rise in oil price. I believe that is the major contributor because, traditionally, there has always been a positive correlation between oil price and GDP growth,” Yusuf said, adding that the continuous importation of petroleum products is a major leakage on the economy.
“The economy is beginning to progressively recover from the shocks of COVID-19. We are moving towards a gradual normalisation of the economy. We need to create the environment to attract a lot more investments because it is investments that drive growth. We need to deal with our macroeconomic environment. We need to deal with inflation, which is still very high at over 15.4 per cent.
“More importantly, we need to ensure that this growth also reflects on the welfare of the people because if you tell people that the economy is growing, they will be wondering what you are talking about, given the level of poverty. For me, this is the most fundamental issue,” he noted.
Corroborating Yusuf’s position, Chairman of Financial Reporting Council of Nigeria (FRCN), Dr. Sam Nzekwe, said: “If you say the economy is growing and you don’t see the impact on the people, one wonders what kind of growth you are talking about.”
Nzekwe regretted that the growth is driven by the service sector, which has little or no impact on the capacity to create jobs.
“We are happy that the economy is recovering from COVID shocks. But you can’t build a sustainable economy without the productive sector,” he said, advising the government to create an enabling environment for the manufacturing sector to thrive.
“We need functional infrastructure. The power supply is still an issue. We also need to deal with the issue of insecurity. Without a safe and secure environment, investors will not come,” he said.
The report notes: “Nigeria’s GDP grew by 3.98 per cent (year-on-year) in real terms in the fourth quarter of 2021, showing a sustained positive growth for the fifth quarter since the recession witnessed in 2020 when output contracted by -6.1 per cent and -3.62 per cent in Q2 and Q3 of 2020 under the pandemic. The fourth-quarter growth indicates a steady economic recovery accounting for yearly growth of 3.4 per cent in 2021.
“The Q4 2021 growth rate was higher than the 0.11 per cent growth rate recorded in Q4 2020 by 3.87 per cent points and lower than 4.03 per cent recorded in Q3 2021 by 0.05 per cent points.
“Nevertheless, quarter-on-quarter, real GDP grew at 9.63 per cent in Q4 2021 compared to Q3 2021, reflecting a higher economic activity than the preceding quarter. In the quarter under review, aggregate GDP stood at N49.276 trillion in nominal terms.
“This performance is higher when compared to the fourth quarter of 2020, which recorded aggregate GDP of N43.564 trillion, indicating a year-on-year nominal growth rate of 13.11 per cent. The nominal GDP growth rate in Q4 2021 was higher, relative to 10.07 per cent growth recorded in the fourth quarter of 2020 but lower compared to 15.41 per cent growth recorded in the preceding quarter. 2021 yearly nominal growth stood at 13.92 per cent.”