Despite two quarters of GDP growth, 47.8% of Nigeria’s economy still in recession

The National Bureau of Statistics (NBS) reported on Sunday that Nigeria’s GDP increased by 0.51 percent in the first quarter of 2021.

This is the second consecutive expansion since the pandemic-induced recession in the second and third quarters of 2020.

However, Ripples Nigeria analysis shows that, while the economy is improving in general, 22 of the 46 sectors surveyed by NBS are still in recession.

According to NBS GDP data, these 22 sectors of the economy have been growing at a negative rate since the beginning of the Covid-19.

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Oil refining, a sub-sector of the mining and quarrying sector, led the negative table with a negative growth rate of 57.05 percent in the first quarter of 2021.

In previous quarters, the sector reported losses of -67.66 -68.29 -56.50 in Q2, Q3, and Q4 of 2020, respectively.

Since the second quarter of 2020, road transportation has also remained negative.

According to NBS, road transport, a sub-sector of transportation and storage, experienced a negative growth rate of -23.75 percent in the first quarter of 2021. This follows a negative growth rate of -1.37, -46.64, and -51.37 in the last three quarters of 2020, respectively.

Air transport, another subsector of transportation and storage, has remained in recession despite a slight improvement in the previous quarters.

According to NBS data, the sector contracted by 11.78 percent in Q1, an improvement from -51.69 percent in the previous quarter. Air transport contracted by -57.38 and -38.86 percent in the second and third quarters of 2020, respectively.

Rail Transport and Pipelines’ -7.30 percent negative growth in the first quarter of 2021 is the fourth highest among still-recessionary sectors.

Another transportation and storage subsector, Rail Transport and Pipelines, continued to improve, albeit with a negative growth rate from 11.99 percent in Q4.

After the lockdown and restrictions imposed by covid-19, the sector returned -46.45 and -63.32 in Q3 and Q2.

Water transportation and education round out the top six sectors with the most negative growth.

Water’s first-quarter growth negative growth improved to -6.42 from -12.12 in Q4 2020.

The sector experienced -17.37 negative growth in Q3, compared to -28.33 in Q2.

The education sector grew at a negative rate of -6.20 percent, down from -11.43 percent in Q4.

The sector has a negative growth rate of -20.74 percent in Q3 and a negative growth rate of -24.12 percent in Q2 of 2020.

Other sectors are detailed in the table below.

What the figures say

Businesses in sectors with negative growth rates suggest that these sectors require more government attention because they are currently growing at a rate lower than the inflation rate.

These could lead to lower investment in the sector, job losses, and difficulty obtaining commercial bank loans for players in these sectors.

In his reaction to the GDP figures, the Director-General of the Lagos Chamber of Commerce, Madu Yusuf, emphasized these points.

According to him, the government must do a lot to help save the sectors of the economy that have been in recession for nearly a year, particularly the entertainment industry, from total collapse.

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