OVERVIEW OF GDP IN Q2 2021

27 Aug OVERVIEW OF GDP IN Q2 2021

Nigeria’s Gross Domestic Product (GDP) grew by 5.01%(year-on-year) in real terms in the second quarter  of 2021, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

The Q2 2021 growth rate was higher than the -6.10% growth rate  recorded in Q2 2020 and the 0.51% recorded in Q1 2021 year on year, indicating the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions.

The steady recovery observed since the end of 2020, with the gradual return of commercial activity as well as local and international travel, accounted for the significant increase in growth performance relative to the second quarter of 2020 when nationwide restrictions took effect. Year to date, real GDP grew 2.70% in 2021 compared to -2.18% for the first half of 2020. Nevertheless, quarter on quarter, real GDP grew at -0.79% in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.
In the quarter under review, aggregate GDP stood at N39,123,713.32 million in nominal terms, higher than the second quarter of 2020 with aggregate GDP of N34,023,197.60 million, indicating a year on year
nominal growth rate of 14.99%.

The nominal GDP growth rate in Q2 2021 was higher than -2.80% growth recorded in the second quarter of 2020 when economic activities slowed sharply at the outset of the
pandemic.

The Q2 2021 nominal growth rate was also higher than 12.25% growth recorded in Q1 2021.
For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors.

OIL SECTOR

In the second quarter of 2021, average daily oil production stood at 1.61 million barrels per day (mbpd), which is -0.19mbpd lower than the average daily production of 1.81mbpd recorded in the same quarter of
2020 and -0.10mbpd lower than the 1.72mbpd recorded in the first quarter of 2021

Real growth of the oil sector was –12.65% (year-on-year) in Q2 2021 indicating a decrease of –6.02% points relative to the growth rate recorded in the corresponding quarter of 2020.

Growth decreased by –
10.44% points when compared to Q1 2021 which was –2.21%. For the first half of 2021, real GDP was recorded at -7.13%, compared to -0.80% for the first half of 2020, the performance reflecting lower oil
output. Quarter-on-quarter, the oil sector recorded a growth rate of -20.35% in Q2 2021.

The Oil sector contributed 7.42% to total real GDP in Q2 2021, down from figures recorded in the corresponding period of 2020 and down compared to the preceding quarter, where it contributed 8.93% and 9.25% respectively

THE NON-OIL SECTOR

The non-oil sector grew by 6.74% in real terms during the reference quarter (Q2 2021).

The Q2 2021 growth rate was higher by 12.80% points compared to the rate recorded in the same quarter of 2020 and 5.95% points higher than the first quarter of 2021.

During the quarter, the sector was driven mainly by growth in Trade, Information and Communication (Telecommunication), Transportation (Road Transport), Electricity, Agriculture (Crop Production) and Manufacturing (Food, Beverage & Tobacco), reflecting the easing of movement, business and economic activity across the country relative to the same period a year earlier.

In real terms, the Non-Oil sector contributed 92.58% to the nation’s GDP in the second quarter of 2021, higher from shares recorded in the second quarter of 2020 which was 91.07% and the first quarter
of 2021 recorded as 90.75%.

 

MAJOR ECONOMIC SECTORS: Q2 2021

MINING AND QUARRYING

The Mining & Quarrying sector consists of Crude Petroleum and Natural Gas, Coal Mining, Metal ore and Quarrying and other Minerals sub-activities. This sector grew nominally by –6.72% (year on year) in Q2 2021.

Quarrying and Other Minerals exhibited the highest growth rate of all the sub-activities at 65.56%, followed by Coal mining activity at 52.07%.

However, Crude Petroleum and Natural gas was the main
contributor to the sector with a weight of 91.88% in Q2 2021. Comparing Q2 2021’s rate of growth against Q2 2020 indicates an increase of 9.30% points, but a fall of -6.59% points relative to Q1 2021 growth rates.

The Mining & Quarrying sector contributed 6.30% to overall GDP in the second quarter of 2021, lower than the contributions recorded in the second quarter of 2020 at 7.76% and in Q1 2020 recorded at 7.09%.

In real terms, the Mining and Quarrying sector grew by –12.29% (year-on-year) in the second quarter of 2021.

Compared to the same quarter of 2020, this growth rate was lower by –5.68% points, and -10.10% points lower than in Q1 2021. Quarter on quarter, growth rate recorded was -18.98%.

For the first half of 2021, growth rate for the sector stood at -6.98% compared to -1.04% for the first half of 2020.

The contribution of Mining and Quarrying to Real GDP in the quarter under review stood at 7.58%, lower than the rate of 9.08% recorded in the corresponding quarter of 2020 and lower than the 9.28% recorded in the first quarter of 2021

AGRICULTURE

Four sub-activities make up the Agricultural sector: Crop Production, Livestock, Forestry and Fishing. The sector grew by 6.36% year-on-year in nominal terms in Q2 2021, indicating a fall of -13.54% points from the same quarter of 2020.

Compared with the preceding quarter’s growth rate of 15.14%, this
represented a decrease of -8.78% points.

Crop Production remained the major driver of the sector, accounting for 68.60% of overall nominal growth of the sector in Q2 2021.
Quarter on quarter, growth stood at 1.03% in the second quarter of 2021. Agriculture contributed 22.13% to nominal GDP in the second quarter of 2021.

This figure was lower than the rates recorded for the second quarter of 2020 which recorded 23.92% but higher than the rate recorded in the first quarter of 2021 which stood at 21.42%

In the second quarter of 2021, the agricultural sector grew by 1.30% (year-on-year) in real terms, a decrease of -0.28% points from the corresponding period of 2020, and a decrease of -0.97% points from
the preceding quarter which recorded a growth rate of 2.28%.

On a half year basis, the sector grew 1.77%
in 2021 compared to 1.88% for the first half of 2020. On a quarter on quarter basis, the sector grew at 5.55%.
By contribution, the sector accounted for 23.78% of overall GDP in real terms in Q2 2021, lower than the contribution in the second quarter of 2020 which stood at 24.65% but higher than the first quarter of 2021 which recorded 22.35%.

MANUFACTURING
The Manufacturing sector is comprised of thirteen activities: Oil Refining; Cement; Food, Beverages and Tobacco; Textile, Apparel, and Footwear; Wood and Wood products; Pulp Paper and Paper products; Chemical and Pharmaceutical products; Non-metallic Products, Plastic and Rubber products; Electrical and Electronic, Basic Metal and Iron and Steel; Motor Vehicles and Assembly; and Other Manufacturing.
Nominal GDP growth of the Manufacturing sector in the second quarter of 2021 was recorded at 38.33% (year-on-year), 38.47% points higher than figure recorded in the corresponding period of 2020 (-0.14%) and 6.23% points higher than the preceding quarter figure of 32.10%.

Quarter on quarter growth of the sector was recorded at -9.22%. The contribution of Manufacturing to Nominal GDP in the second quarter
of 2021 was 14.18%, higher than the figure recorded in the corresponding period of 2020 at 11.79% but lower than the first quarter of 2021 at 15.27%.
Real GDP growth in the manufacturing sector in the second quarter of 2021 was 3.49% (year on year), higher than the same quarter in 2020 and the preceding quarter by 12.27% points and 0.08% points
respectively.

On a half year basis, growth rate of the sector stood at 3.44% compared to -4.07% recorded for half year 2020. On a quarter-on-quarter basis, growth stood at -13.10%.

Real contribution to GDP in Q2 2021 was 8.69%, lower than the 8.82% recorded in the second quarter of 2020 and the 9.93%
recorded in the first quarter of 2021.

ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY
The Electricity, Gas, Steam and Air conditioning Supply sector recorded a year on year growth of 114.30% in the second quarter of 2021.

This was 105.66% points higher than the 8.64% growth rate recorded in the corresponding quarter of 2020, and 83.60% points higher than the growth rate of 30.70% recorded in the quarter before.

Quarter–on-quarter, the sector recorded a growth rate of 281.45% in Q2 2021.

The contribution of Electricity, Gas, Steam and Air Conditioning Supply to Nominal GDP in Q2 2021 was 1.72%, higher than the contribution made in the corresponding quarter of 2020 at 0.92% and higher with its contribution of 0.44% in the quarter before.
In real terms, the sector grew by 78.16% in Q2 2021, an improvement from the growth rate of –3.00% recorded in the same quarter of 2020. When compared to the immediate past quarter, there was an
increase of 69.50% points from 8.66% recorded.

On a half year basis, the sector grew by 56.58% year on year, compared to -2.78% recorded last year. Quarter on quarter, the sector grew at a rate of 264.23%.

The contribution of this sector to real GDP in the second quarter of 2021 was 0.80%, higher than 0.47% recorded in Q2 2020. This figure was also higher than 0.22% recorded in Q1 2021.

CONSTRUCTION
The Construction sector grew by 47.11% in nominal terms (year on year) in the second quarter of 2021, a rise by 50.31% points compared to the rate of -3.20% recorded in the same quarter of 2020. There was an increase by 3.23% points when compared to the rate recorded in the preceding quarter.

Nominal growth, quarter on quarter was recorded at -16.05%. Construction contributed 8.74% to nominal GDP in the second quarter of 2021, higher than the 6.83% it contributed a year earlier but lower than the 10.17% contributed in the first quarter of 2021.
The real growth rate of the construction sector, in the second quarter of 2021, was recorded at 3.70% (year on year), higher by 35.46% points from the rate recorded a year previous.

Relative to the preceding quarter, there was an increase of 2.27% points. For the first half of 2021, growth was recorded at 2.40%
compared to -15.99% in 2020.

Quarter on quarter, the sector grew by -23.08% in real terms, higher than the -24.77% it recorded in the second quarter of 2020.
Its contribution to total real GDP was 3.19% in the second quarter of 2021; lower from its contribution of 3.23% in the same quarter of the previous year, and the immediate past quarter where it contributed
4.12%.

In real terms, Trade’s year on year growth stood at 22.49% in the second quarter of 2021, which was 39.08% points higher than the rate recorded a year earlier at -16.59%, and 24.92% points higher than the
preceding quarter at -2.43% growth rate.

For the first half of 2021, growth in the trade sector stood at 8.97% compared to -9.64% for 2020. Quarter on quarter growth stood at 5.85%, higher than the quarter on quarter growth recorded in the second quarter of 2020 at -15.68%.

Trade’s contribution to GDP was 16.66%, which was also higher than the 14.28% it represented the previous year, and the 15.61% recorded
in the first quarter of 2021.
TRADE
In the second quarter of 2021, the nominal year on year growth rate of Trade stood at 23.27%. This indicates an increase of 38.21% points when compared to the growth rate of -14.95% in the second
quarter of 2020, and 23.14% points than the previous quarter growth rate of 0.13%.

The quarter on quarter growth rate was 4.47%.

Trade’s contribution to Nominal GDP in the second quarter of 2021 was 14.38%, higher than the contribution in the same quarter of the previous year of 13.41%, and higher than the preceding quarter recorded at 13.46%.

ACCOMMODATION AND FOOD SERVICES
In nominal terms, Accommodation and Food Services grew by 19.07% year on year in the second quarter of 2021.

This represented an increase of 49.23% points relative to the same quarter of 2020, when the growth rate was -30.16%.

Growth was higher than in the preceding quarter by 7.68% points when growth
was 11.39%. Quarter on quarter growth stood at -59.57%. Accommodation and Food Services contribution to nominal GDP stood at 0.49% in the second quarter of 2021, higher slightly than the figure recorded a year prior but lower than the first quarter of 2021 contribution recorded at 0.48% and 1.20% respectively.
The real year on year growth rate for this sector in the second quarter of 2021 stood at 1.97%, 42.16% points higher from -40.19% recorded a year earlier.

Relative to the preceding quarter, growth rate was 6.58% points higher from -4.60% recorded.

For the first half of 2021, growth was recorded at 13.50% compared to -4.13% recorded in the preceding year.

Quarter on quarter real growth was -61.11%.

In second quarter of 2021, the sector represented 0.40% of real GDP, slightly lower than the contribution of 0.41% recorded in the second quarter of 2020 and the 1.01% recorded in the first quarter of 2021.

INFORMATION & COMMUNICATION
In nominal terms, in the second quarter of 2021 the sector growth was recorded at -0.07% (year-on-year), a 1.08% point increase from the rate of -1.15% recorded in the same quarter of 2020, but -7.93% points lower than rate recorded in the preceding quarter.

The quarter on quarter growth rate recorded was 20.55%.

The Information and Communications sector contributed 12.22% to total Nominal GDP, lower than 14.06% recorded in the same quarter of 2020 but higher than the 9.91% contributed in the preceding
quarter.
The Information and Communication sector is composed of the four activities of Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording and Music Production; and
Broadcasting.
In the second quarter of 2021, the sector recorded a growth rate of 5.55% in real terms, year on year, indicating a decrease of -9.54% points compared to the second quarter of 2020.

For the first half of 2021, growth in this sector stood at 5.97% compared to 11.59% in 2020 while quarter on quarter growth was
19.28% in real terms. Of total real GDP, the sector contributed 17.92% in the second quarter of 2021, slightly higher than in the same quarter of the previous year in which it represented 17.83% and the
preceding quarter in which it represented 14.91%.

TRANSPORTATION AND STORAGE

Six activities make up the Transportation and Storage sector: Road Transport; Rail Transport and Pipelines; Water Transport; Air Transport; Transport Services; and Post and Courier Services.
The sector grew by 112.56% in nominal terms in the second quarter of 2021 (year on year).

This rate was higher relative to the figure of -41.63% recorded for the corresponding quarter of 2020 and -9.25% in the previous quarter. All the six sub-activities under Transport and Storage industry recorded positive growth rates in the second quarter of 2021. Quarter on quarter growth stood at -5.60%.

Transport activities contributed 2.09% to Nominal GDP in Q2 2021, an increase from the 1.13% recorded in the corresponding period of 2020, but lower than 2.16% recorded in first quarter of 2021.
In real terms, the Transportation and Storage sector grew by 76.81% in Q2 2021. This rate represented an increase of 126.03% points relative to the same quarter of the previous year and an increase of 98.70% points relative to the preceding quarter.

For the first half of 2021, growth stood at 6.30% compared to –
20.47% in 2020. Quarter on quarter, growth was -9.50%.

The contribution of the sector to real GDP in Q2 2021 stood at 1.26%, an increase from 0.75% recorded a year earlier but lower than 1.38% recorded in the first quarter of 2021

ARTS, ENTERTAINMENT AND RECREATION
In Nominal terms, the Arts, Entertainment and Recreation sector grew 1.89% in the second quarter of 2021 (year-on-year), representing an increase of 2.36% points relative to the preceding quarter growth
rate of -0.47% and an increase of 20.99% points compared with the growth rate of -19.10% the preceding
year.

On a quarterly basis, growth was recorded at -29.54%, higher than quarter-on-quarter growth of Q2 2020 recorded at -31.18%.

The activity contributed 0.16% to total nominal GDP in the second quarter of 2021, lower than the 0.18% it contributed in Q2 2020 as well as the 0.22% it contributed in Q1 2021.
In real terms, the activity grew by 1.22% year on year which was higher than the rate recorded in Q2 2020 by 10.15% points, and 2.35% points higher when compared with the preceding quarter. Quarter on quarter, growth stood at -29.66% in real terms, higher than quarter-on-quarter growth recorded in Q2 2020 at -31.29%.

Overall, Art, Entertainment and Recreation contributed 0.21% to real GDP in Q2 2021, slightly lower than it contributed a year earlier and lower than 0.30% recorded in the first quarter of 2021

REAL ESTATE SERVICES
In the second quarter of 2021, real estate services grew in nominal terms, by 7.38%, or 24.56% points higher than the growth rate reported for the same period in 2020 but -0.66% points lower compared to the preceding quarter.

Quarter on quarter, the sector growth rate was -1.85%.

The contribution to nominal GDP in Q2 2021 stood at 5.05% as against 5.41% recorded in the second quarter of 2020, but slightly
higher than the 5.03% it accounted for in the first quarter of 2021.
Real GDP growth for the second quarter of 2021 stood at 3.85%, higher than the growth recorded in the second quarter of 2020 by 25.84% points, and 2.08% points higher relative to Q1 2021.

For the first half of 2021, Real estate services grew 2.79% year on year in real terms, compared to -14.11% recorded in 2020.
Quarter-on-quarter, the sector grew by -0.72% in the second quarter of 2021.

The sector contributed 5.28% to real GDP in Q2 2021, slightly lower than the 5.34% it recorded in the corresponding quarter of
2020.

FINANCE AND INSURANCE

As a whole the financial and insurance services sector grew at -1.86% in nominal terms (year on year), with Financial Institutions growing at -3.93% while Insurance recorded a growth rate of 16.41%.

The overall rate was lower than that in Q2 2020 by –22.68% points, and by -4.01% points than the preceding quarter.
Quarter on quarter growth was -3.45%. The sector’s contribution to the aggregate nominal GDP was 3.21% in Q2 2021, lower than the 3.76% it represented a year earlier, and the contribution of 3.25% it
made in the preceding quarter.
The Finance and Insurance Sector consists of the two subsectors, Financial Institutions and Insurance, which accounted for 87.92% and 12.08% of the sector respectively in real terms in Q2 2021.
Growth in this sector in real terms totaled –2.48%, lower by –20.97% points from the rate recorded in the second quarter of 2020 and -2.02% points from the rate recorded in the preceding quarter. For the first half of 2021, growth in financial and insurance services stood at -1.47% year on year, compared to 19.63%
year on year for 2020. Quarter on quarter growth in real terms stood at -2.18%.

The contribution of Finance and Insurance to real GDP totaled 3.72%, lower than the 4.00% recorded in the second quarter of 2020 by –0.29% points, and the 3.77% recorded in Q1 2021 by -0.05% points.

ADMINISTRATIVE AND SUPPORT SERVICES
In nominal terms, the Administrative and Support Services sector grew by 5.45% (year on year) in Q2 2021, higher by 5.92% points compared to Q2 2020, and by 3.62% points compared to the previous
quarter.

Quarter on quarter, growth rate in the sector was 4.86% in Q2 2021. The contribution of Administrative and Support Services to nominal GDP was 0.02% in Q2 2021, relatively same as in Q2 2020
and as well as in the preceding quarter.
In real terms, the sector recorded a growth rate of 4.79% (year-on-year), an increase of 7.18% points from the corresponding quarter of 2020 and 5.56% points from the rate recorded in Q1 2021.

Quarter on quarter, the sector grew by 6.24% in Q2 2021. For the first half of 2021, the sector recorded a growth rate
of 2.02% year on year, compared to -2.15% in 2020.

The sector’s contribution to real GDP was 0.02% in second quarter 2021, unchanged from the corresponding quarter in 2020 and first quarter 2021.

PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES
Real growth in the sector was recorded at 1.27% in Q2 2021, an increase of 16.69% points relative to the rate recorded in the corresponding period of 2020, and 5.11% points higher than that of Q1 2021.

On a half year basis, the sector grew -1.43% year on year, compared to -8.08% recorded in 2020.

On a quarter-on-quarter basis, the sector grew by -6.26% in Q2 2021. Professional, Scientific and Technical Services contributed 3.09% to aggregate GDP in Q2 2021, lower than the 3.20% it contributed in Q2 2020 and 3.27% recorded in Q1 2021.
In Q2 2021, Professional, Scientific and Technical Services recorded a nominal growth of 1.92% (year-on-year), which is 15.67% points higher than Q2 2020, and 3.23% points higher than the rate recorded in Q1
2021.

Quarter-on-quarter, the sector grew by -7.48%. The contribution of Professional, Scientific and Technical Services to nominal GDP was 2.67% in Q2 2021, down from the 3.01% contribution in Q2 2020
and from the 2.82% recorded in Q1 202

EDUCATION
Nominal growth in the Education sector in the second quarter of 2021 was 6.97% (year-on-year), up by 29.06% points from the growth of -22.09% reported in the corresponding quarter of 2020, and by 7.27%
points when compared to Q1 2021 growth rate of –0.30%.

The contribution of Education to nominal GDP in Q2 2021 was 1.27%, down from 1.37% estimated in Q2 2020 and from 1.75% in Q1 2021.
Real growth in Education year-on-year stood at 0.63% in Q2 2021; an increase of 24.76% points from the corresponding quarter of 2020 which was estimated at -24.12%.

When compared with the previous quarter’s rate of -6.20%, the sector’s growth increased by 6.84% points. For half year 2021, the sector performed better growing at -3.50% year on year compared to -10.83% recorded in 2020.

The Sector contributed 1.37% to total real GDP in Q2 2021 which was lower than 1.43% reported for the corresponding quarter in 2020 and the 1.94% recorded in Q1 2021.

 

PUBLIC ADMINISTRATION
In nominal terms, the Public Administration sector grew by -1.06% in Q2 2021, -5.08% points lower by from the corresponding quarter of 2020 and lower by –2.78% points relative to Q1 2021.

Quarter on quarter, the sector grew by 30.61%. The contribution of Public Administration to Nominal GDP stood at 1.90% in Q2 2021, lower than the 2.21% recorded in Q2 2020 by –0.31% points and higher than the 1.43% recorded in Q1 2021 by 0.48% points.
In real terms, the sector recorded a growth rate of -1.68% (year on year) in Q2 2021, or -3.70% points lower from the Q2 2020 rate and –0.80% points lower than the Q1 2021 rate.

On a half year basis, the sector grew -1.34% year on year which is an improvement compared to – 2.88% recorded the previous
year.

On quarter on quarter, the sector grew by 32.33% in Q2 2021. The contribution of Public Administration to Real GDP stood at 2.21% in Q2 2021, lower compared to 2.36% in Q2 2020 but higher
from 1.65% in Q1 2021.

HUMAN HEALTH AND SOCIAL SERVICES
The year on year growth rate for Human Health and Social Services in nominal terms was 11.12%, up relative to the growth rate of -0.07% reported in the same quarter of 2020 by 11.19% points and up by
0.28% points compared to Q1 2021. Quarter on quarter growth was 9.50%.

The contribution to nominal GDP was 0.68% in Q2 2021, lower than the 0.70% recorded in Q2 2020 and up from the 0.60% recorded in
Q1 2021.
Real GDP growth of Human Health and Social Services for Q2 2021 stood at 4.92% (year-on-year) compared to 1.89% for the corresponding period of 2020, a rise of 3.02% points.

The growth in Q2 2021 was also higher than the growth recorded in Q1 2021 by 0.27% points.

Quarter on quarter, this sector grew by 7.93% while half year growth of 4.79% year on year was recorded for 2021 compared to 1.49%
recorded in 2020.

The contribution of Human Health and Social Services to real GDP was 0.77% in Q2 2021, unchanged from the figure recorded in Q2 2020 but slightly higher than the 0.71% recorded for the
preceding quarter.

OTHER SERVICES
In nominal terms, Other Services grew by 1.27% (year-on-year) in Q2 2021. This growth rate was higher than the -13.40% growth rate recorded in the same quarter of the previous year and the growth rate of -0.41% in Q1 2021 by 14.67% points and 1.68% points respectively.

Quarter on quarter growth was -33.41%. This sector contributed 2.38% to the aggregate nominal GDP in Q2 2021, lower than the 2.70% it contributed in the same period of the previous year and lower than 3.49% it contributed in the preceding quarter.
Other Services real GDP grew by 0.64% (year-on-year) in Q2 2021, 15.70% points higher than growth recorded in the same period of the previous year, and 3.59% points higher than Q1 2021.

Quarter on quarter growth was -32.53% while half year growth for 2021 recorded a better performance at -1.54% year on year compared to -5.98% in 2020. The sector contributed 2.75% to real GDP in Q2 2021 against the 2.87% recorded for the corresponding quarter of 2020 and the 4.05% recorded in Q1 2021