The Nigerian economy sustained its growth trajectory for the fifth consecutive quarter, as the economy recorded a real growth rate of +3.98% year-on-year in Q4 2021, with a cumulative 2021 GDP of +3.40% (from -1.92% in 2020 and higher than the Apex bank’s forecast of +3.1% growth). This expansion is -0.05% lower than +4.03% growth recorded in Q3 2021, and +3.87% better than the +0.11% growth recorded in Q4 2020.

Growth in the oil sector contracted by -8.06% year-on-year in Q4 2021, from -10.73% contraction in Q3 2021 and -19.76% in Q4 2020. The weakness in the oil sector is attributable to a decline in crude oil production, as Nigeria recorded an average daily oil production of 1.50 million barrels per day (mbpd) in Q4 2021, vs 1.57mbpd in Q3 2021 and 1.56mbpd in Q4 2020.

The non-oil sector expanded by +4.73% in Q4 2021, lower than +5.44% expansion in Q3 2021 but better than +1.69% growth in Q4 2020. This growth was largely supported by improvement in the Agriculture sector, Telecommunication sector and Financial and Insurance sector.

Overall, the Oil sector contribution to GDP declined to 5.19% in Q4 2021 from 7.49% in Q3 2021, while Non-oil sector contribution rose to 94.81% in Q4 2021, from 92.51% in Q3 2021.

We expect the local economy to sustain positive growth in the coming quarters amid CBN’s intervention policies (E.g the 100 for 100 policy and imminent creation of special FX bidding scheme for manufacturers), as well as the possibility that Brent crude oil price is maintained at current levels (trading above $91.00/barrel), and projected to average ca $79.00/barrel in 2022 by the Energy Information Administration (EIA), which is higher than the nation’s approved 2022 budget benchmark of $62.00/barrel.

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