Nigeria’s GDP Contracts -14.66% In Q1 2022
In a reflection of the harsh economic climate in the country, Nigeria’s Gross Domestic Product (GDP) rate contracted in the first quarter of 2022, dipping -14.66 from to the last quarter of 2021.
GDP is the monetary measure of the market value of all the goods and services produced in a specific period in a country.
National Bureau of Statistics (NBS) in its latest report released Monday stated that the GDP recorded 3 per cent in the first quarter of the year, lower, quarter by a quarter by 0.88 per cent from the 3.98 per cent recorded in Q4 2021 but higher than the 0.51 per cent growth rate recorded in first-quarter 2021 by 2.60 per cent.
“Nevertheless, quarter-on-quarter, real GDP grew at -14.66 per cent in Q1 2022 compared to Q4 2021, reflecting a lower economic activity than the preceding quarter,” the NBS stated.
The release of the first-quarter record of 3 per cent GDP came a week after the NBS announced that inflation in the country, with the Consumer Price Index (CPI), has quickened to 16.82 per cent In April 2022 while the unabated increasing price of goods and services, has raised fear of a further rise in inflation in May.
Nigeria’s inflation rate rose to 15.7 per cent in February from 15. 6 per cent in January and further rose to 15.92 per cent in March 2022.
The release of the NBS GDP figure coincided with the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) which is expected to announce new measures to combat the heightening inflationary pressure.
Nigeria has faced declining revenue amid increasing obligations while the Russian-Ukraine crisis has dampened the little recovery made from the aftermath of the lockdown occasioned by the Covid-19 pandemic.
The price of items including foods has skyrocketed at a time when consumers grapple with declining purchasing power and unemployment currently peaked at 33.3 per cent.
However, on-year-year basis, the Bureau stated that the GDP recorded a growth of 3.11 per cent in real terms in the first quarter of 2022, representing the sixth consecutive quarter of positive growth by the Nigerian economy.
“Nigeria’s Gross Domestic Product (GDP) grew by 3.11 per cent (year-on-year) in real terms in the first quarter of 2022, showing a sustained positive growth for six consecutive quarters since the recession witnessed in 2020 when negative growth rates were recorded in quarter two and three of 2020. The first quarter of the 2022 growth rate further represents an improvement in economic performance. The observed trend since Q4 2020 is an indication of gradual economic stability.”
The aggregate GDP stood at N45,317,823.33 trillion in nominal terms, higher than the aggregate GDP of N40,014,482.74 trillion in Q1 2021, indicating a year-on-year nominal growth rate of 13.25 per cent.
The statistics office said that the oil sector of the Nigerian economy contracted by 26.04 per cent (year-on-year) in Q1 2022, while the non-oil sector rose by 6.08 per cent in real terms during Q1 2022.
“The nation in the first quarter of 2022 recorded an average daily oil production of 1.49 million barrels per day (mbpd), lower than the daily average production of 1.72mbpd recorded in the same quarter of 2021 by 0.23mbpd and lower than the fourth quarter of 2021 production volume of 1.50mbpd by 0.01mbpd.
“Real growth of the oil sector was –26.04 per cent (year-on-year) in Q1 2022 indicating a decrease of 23.83 per cent points relative to the rate recorded in the corresponding quarter of 2021. Growth decreased by 17.99 per cent points when compared to Q4 2021 which was –8.06 per cent. Quarter-on-Quarter, the oil sector recorded a growth rate of 9.11 per cent in Q1 2022.
The Oil sector contributed 6.63 per cent to the total real GDP in Q1 2022, down from the figures recorded in the corresponding period of 2021 and up compared to the preceding quarter, where it contributed 9.25 per cent and 5.19 per cent respectively.
“The non-oil sector grew by 6.08 per cent in real terms during the reference quarter (Q1 2022). This rate was higher by 5.28 per cent points compared to the rate recorded same quarter of 2021 and 1.34 per cent points higher than the fourth quarter of 2021. This sector was driven in the first quarter of 2022 mainly by Information and Communication (Telecommunication); Trade; Financial and Insurance (Financial Institutions); Agriculture (Crop Production); and Manufacturing (Food, Beverage & Tobacco), accounting for positive GDP growth.
In real terms, the non-Oil sector contributed 93.3 per cent to the nation’s GDP in the first quarter of 2022, higher than the share recorded in the first quarter of 2021 which was 90.75 per cent and lower than the fourth quarter of 2021 recorded as 94.81 per cent.
“The agricultural sector in the first quarter of 2022 grew by 3.16 per cent (year-on-year) in real terms, an increase of 0.88 per cent points from the corresponding period of 2021, and a decrease of 0.42 per cent points from the preceding quarter which recorded a growth rate of 3.58%. It grew on a quarter-on-quarter basis at -28.90 per cent.
However, the sector contributed 22.36 per cent to overall GDP in real terms in Q1 2022, higher than the contribution in the first quarter of 2021 and lower than the fourth quarter of 2021 which stood at 22.35% and 26.84 per cent respectively.
The Manufacturing sector is comprised of thirteen activities: Oil Refining; Cement; Food, Beverages and Tobacco; Textile, Apparel, and Footwear; Wood and Wood Products; Pulp Paper and Paper products; Chemical and Pharmaceutical products; Non-metallic Products, Plastic and Rubber products; Electrical and Electronic; Basic Metal and Iron and Steel; Motor Vehicles and Assembly; and Other Manufacturing.
The NBS noted that “nominal GDP growth of the Manufacturing sector in the first quarter of 2022 was recorded at 11.72 per cent (year-on-year), 20.38 per cent points lower than the figure recorded in the corresponding period of 2021 (32.10 per cent) and 13.80 per cent points lower than the preceding quarter figure of 25.52 per cent. Quarter-on Quarter, growth of the sector was recorded at -2.96% during the quarter. The contribution of Manufacturing to Nominal GDP in the first quarter of 2022 was 15.06 per cent, lower than the figure recorded in the corresponding period of 2021 at 15.27 per cent and higher than the fourth quarter of 2021at 14.28 per cent.
“Real GDP growth in the manufacturing sector in the first quarter of 2022 was 5.89 per cent (year-on-year), higher than the same quarter of 2021 and higher than the preceding quarter by 2.49 per cent points and 3.61 per cent points respectively. The growth rate of the sector on a quarter-on-quarter basis stood at 2.85 per cent.
A real contribution to GDP in 2022 first quarter was 10.20 per cent, higher than the 9.93 per cent recorded in the first quarter of 2021 and higher than the 8.46 per cent recorded in the fourth quarter of 2021.”
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