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Nigeria’s GDP report for Q4: GDP grew by 3.9% y/y – by Coronation Merchant Bank

The national accounts for Q4 ‘21 by the National Bureau of Statistics (NBS) show that GDP grew by 3.9% y/y compared with 4.0% y/y recorded in Q3 ’21. For FY ’21, GDP grew by 3.4% y/y compared with a contraction of -1.92% y/y in 2020. Our projection for FY ‘21 was 2.8% y/y, 60bps lower.

The expansion recorded in Q4’ 21 can be partly attributed to improved harvest, steady progress in stemming the spread of the coronavirus, minimal disruptions to economic activities, and positive base effects. 

  • The oil economy contracted by -8.1% y/y in Q4 compared with a contraction of -10.7% y/y recorded in the previous quarter. For FY ’21, the sector contracted by -8.3% y/y compared with -8.9% y/y in 2020. Based on data from the NBS, average crude oil production in Q4 was 1.50mbpd, compared with 1.57mbpd in the previous quarter and 1.56mbpd in Q4 ‘20. The performance of this sector reflects the impact of low investment, poor infrastructure, and operational challenges seen in 2021. Overall, the sector contributed 5.2% to total GDP in 2021. 
  • Meanwhile, the non-oil economy grew by 4.7% y/y in Q4 compared with 5.4% y/y recorded in Q3. For FY ’21, the non-oil economy grew by 4.4% y/y compared with a contraction of -1.3% y/ in 2020. Key drivers within the non-oil economy include :  transport and storage (Q4; 29.72% y/y, FY; 16.3% y/y) ; finance and insurance (Q4; 24.14% y/y, FY;10.07% y/y) ; trade (Q4; 5.34% y/y, FY; 8.6%y/y), telecommunications (Q4; 5.31% y/y, FY;7.3% Y/Y), construction (Q4 ; 3.46% y/y, FY ; 3.1% Y/Y), manufacturing (Q4 ; 2.28% y/y, FY ;3.4% Y/Y ), real estate (Q4 ; 1.47% y/y, FY ; 2.3% Y/Y), and  agriculture (Q4 ; 3.58% y/y, FY ; 2.1% y/y).  
  • Agriculture grew by 3.58% y/y compared with 1.2% recorded in Q3. Crop production was the major driver of the sector and accounted for 90% of agriculture GDP, the segment grew by 3.87% y/y. We also note that the livestock, forestry, and fisheries segments grew by 0.41% y/y, 1.41% y/y, and 1.69% y/y respectively. Overall, the agriculture sector contributed 26.8% and 25,9% to real GDP in Q4 and FY ’21 respectively. The sector’s performance can be partly hinged upon the improved harvest, despite challenges such as insecurity in specific farming areas, storage and logistics difficulties, among others.       
  • Telecommunications posted growth of 5.31% y/y compared with 10.9% y/y recorded in Q3. The sector continues to benefit from the mandatory push to the digital landscape triggered by the ongoing pandemic. Some businesses within the sector have recorded revenue boosts from data, fintech and digital services. 
  • In Q4, real estate and construction grew by 1.47% y/y and 3.46% y/y respectively. The growth registered for both sectors could be attributed to development activities on the back of recommencement of delayed projects which were paused due to the slowdown triggered by the pandemic.  
  • In the manufacturing sector, growth slowed to 2.3% y/y in Q4 compared with 4.3% y/y recorded in Q3. Within the sector, the food and beverages segment grew by 4.8% y/y, (accounting for 48.9% of total manufacturing GDP) compared with 6.1% y/y recorded in Q3. While the textile, apparel and footwear segment contracted by -2.37% y/y. The cement segment grew by 5.5% y/y in Q3. Consumption patterns are relatively better. Furthermore, fx liquidity which has a direct impact on imported manufacturing input has been relatively stable and this bodes well for the sector.
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