Tuesday, February 22, 2022 / 05:20 AM / by Proshare Research/ Header Image Credit: EcoGraphics
Nigeria's average annual growth appreciated from +2.7% in H1 2021 to +3.17% in 9M 2021. Despite the improvement, the country's growth lags its population growth rate, which as of the last count, was estimated as 3.3%. The third quarter of 2021 saw improvements in trade, Information, and communication (Telecommunication); Financial and Insurance (Financial Institutions); Manufacturing (Food, Beverage & Tobacco); Agriculture (Crop Production); and Transportation and Storage (Road Transport), which supported the real GDP growth.
The Non-Oil sector contributed 92.51% of the country's GDP in Q3 2021, 134 basis points larger than a contribution made in the third quarter of 2020, which was 91.27%, although 7 basis points lower than the second quarter of 2021 recorded as 92.58%. Meanwhile, the Oil sector contributed 7.42% to the Q2 2021 GDP; this represented a reduction of 183 basis points from 9.25% in Q1 2021, the non-oil sector accounted for the complementary 92.58%. The decrease in the oil sector's contribution could be attributed to the fall in production from 1.61mbp in Q2 2021 to 1.57mbp in Q3 2021. Likewise, the real GDP in Q2 2021 received contributions from Services 49.65%, Agriculture 29.94%, and Industries 20.41%. Overall, the service sector has remained the highest contributing sector with an average 9-month contribution (see chart 6 below).
Chart 6: Contribution of Sectors to Nigeria's GDP
Table 5: Growth in Sectoral GDP
On average, the Electricity sector recorded the fastest growth in the 9 months to September 2021. The sector, which turned out to be the fastest-growing Economy, gained from the significant increase in electricity tariffs nationwide. The transportation sector recovered from a -21.89% contraction in Q1 2021 to deliver an average growth rate of 25.18%, having recorded a massive 76.81% rise in the sector's Q2 output. The sector grew by 33.73% over the period, ahead of the Water Sector, which grew by 25.17% in 2021. The Trade sector rose by 10.68% over the 9 months. The Information and Communication sector recorded a 7.23% growth between January and September, making it the fifth best performing sector in the nine months to September 2021. The Mining and Quarrying sector contracted by -8.35% recorded the worst performance in the period. This is tied to the drop in oil prices in the first half of the year and the low crude oil production recorded in the year (see chart 7 below).
Chart 7: Average Annual GDP Growth in Each Sector (9M 2021)
Source: NBS, Proshare Research