FREE

NIGERIA GROSS DOMESTIC PRODUCT - Nigeria Exits Pandemic-Induced Recession

Nigeria has joined China, Egypt and Ivory Coast on the path to economic recovery, exiting its pandemic-induced recession by a hair’s breadth in Q4’20. The National Bureau of Statistics (NBS) confirmed this in its latest Q4’20 GDP report, which showed that the country defied the disruptive impact of the protests to advance by 0.11% y/y in the last quarter of the year. However, the -1.92% y/y (Vetiva: -2.68% y/y) full year contraction was unavoidable due to the lockdowns in Q2’20 and a sluggish return to normalcy through the rest of the year.

Technology drives output growth The surprising recovery in Q4’20 and subdued output gap for FY’20 is attributed to the telecommunications (ICT) sector, which contributed 12.18% to GDP. Considering the shift in business operations from physical offices to virtual environments, the increased adoption of digital services and investments boded well for the sector, which propelled a stellar 15.90% y/y growth in FY’20 (FY’19: 11.41% y/y). Alongside the ICT sector, gains in the Agricultural sector moderated the contraction in the non-oil sector to -1.25% y/y (FY’19 growth: 2.06% y/y) in 2020.

Base effect supports recovery Following a bumpy 2020, the economy is on course to recover in 2021, riding on the previous year’s low base. Barring the return of hard lockdown measures, we expect higher growth outcomes in 2021 especially in the mid-quarters (Q2 & Q3), that were the most hit by the pandemic in the previous year. Consequently, we expect the economy to bounce back by 3.47% y/y in FY’21. However, an unfavourable base from Q1’20 could limit the pace of recovery in the quarter to 0.75% y/y.