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Nigeria’s Gross Domestic Product (GDP) grew by 0.11 per cent year-on-year in the fourth quarter of 2020, according to the latest GDP report released today by the National Bureau of Statistics (NBS). The positive growth marks the country’s exit from recession – or the first positive quarterly growth after two consecutive quarters of negative growth.

NBS data show the economy contracted by 6.10 per cent and 3.62 per cent in Q2 and Q3 2020, respectively. The slump in economic activity was attributed to the economic shocks caused by the coronavirus pandemic, which necessitated nationwide lockdowns to curtail the spread of the virus.

“Though weak, the positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters,” the NBS stated.

The latest GDP figure for Q4 2020 is 3.74 percentage points higher than the –3.62 per cent recorded in Q3 2020, but it represents a decrease of 2.44 percentage points when compared to the growth rate of 2.55 per cent posted in Q4 2019. Overall, the country's annual real GDP growth rate for 2020 was –1.92 per cent, compared to the 2.27 per cent recorded in 2019.

The GDP figure for last year exceeded the expectations of analysts. The International Monetary Fund (IMF) had estimated that Nigeria's GDP for 2020 will contract by 3.4 per cent due to the economic shocks resulting from the coronavirus pandemic. This was in line with market expectation of around 3 per cent contraction, according to CardinalStone Partners, a Lagos-based investment advisory firm.  

“The marginal growth was mostly driven by faster than expected recovery in the Non- oil (1.69%) sector, which offset sustained weakness in the Oil (-19.76%) sector in the review quarter,” CardinalStone Partners said in a statement following the release of the new GDP report.

The NBS reported that the oil sector contracted by 19.76 per cent in real terms in Q4 2020, representing a 26.12 percentage points decrease when compared to Q4 2019. The sector contributed 5.87 per cent of the total GDP in the quarter under review. For the full year, the oil sector contributed 8.16 per cent to real GDP in 2020, marginally down from accounting for 8.78 per cent of GDP in 2019.

Average daily oil production in Q4 2019 stood at 1.56 million barrels per day (mbpd), down from the 2 mbpd average production recorded in a similar quarter of 2019.

The non-oil sector, according to the report, contributed 94.13 per cent to GDP in Q4 and 91.84 per cent to annual real GDP in 2020. The key performing areas included information and communication, which grew at 14.7 per cent during the last quarter; and the agriculture sector, which grew by 3.42 per cent – its highest performance since Q4 2017 when the sector grew by 4.23 per cent.

According to the Nigerian Gross Domestic Product Report for Q4 and Full Year 2020, aggregate GDP for Q4 2020 in nominal terms stood at N43.6 trillion, higher than the N39.6 trillion recorded in Q4 of the preceding year.