Nigeria proves IMF, World Bank wrong, beats recession in Q4 of 2020

Even the International Monetary Fund and World Bank thought it was not possible until 2021, but the good news is that Nigeria is out of her worst recession in 40 years.

The economy grew by 0.11% in Q4 after contracting for two consecutive quarters in 2020.

The unexpected exit of Nigeria in the fourth quarter after gross domestic product grew 0.11% in the three months through December following easing of restrictions to curb the spread of the coronavirus.

Snippets on the Nigerian Bureau of Statistics (NBS) website gave insights into factors that led to growth. It reads:

“In the fourth quarter of 2020, the nominal year on year growth rate of Trade stood at –0.66%. This indicates a decrease by –2.69% points when compared to the fourth quarter of 2019 growth rate of 2.03% but 9.16% points higher than the previous quarter growth rate of –9.82%.

“In nominal terms, Other Services grew by –1.76% (year-on-year) in Q4 2020. This growth rate was lower than the 4.21% growth rate recorded in the same quarter of the previous year and –5.11% in Q3 2020 by –5.98% points and 3.34% points respectively.

“Nominal GDP growth of the Manufacturing sector in the fourth quarter of 2020 was recorded at 24.60% (year-on-year), -1.69% points lower than recorded in the corresponding period of 2019 (26.29%) but 11.06% points higher than the preceding quarter’s 13.54%. Quarter on quarter growth of the sector was recorded at 5.78%.

“In nominal terms, the Public Administration sector grew by 4.47% in Q4 2020, 1.79% points higher than the corresponding quarter of 2019 but –1.82% points lower relative to Q3 2020. Quarter-on-Quarter, the sector grew by 15.08%.

“Nominal growth in the Education sector in the fourth quarter of 2020 was –5.86% (year-on-year), down by –13.04% points from growth of 7.18% reported in the corresponding quarter of 2019, but up 9.89% points when compared to Q3 2020.

“Agricultural sector grew by 14.03% year-on-year in nominal terms in Q4 2020, showing a rise of 0.23% points from the same quarter of 2019. Looking at the preceding quarter’s growth rate of 13.52%, there was an increase of 0.51% points.

“The non-oil sector grew by 1.69% in real terms in Q4 2020, slower than the 2.26% recorded in the corresponding quarter of 2019, but better than the –2.51% growth rate recorded in the preceding quarter

“In the fourth quarter of 2020, an average daily oil production of 1.56 million barrels per day (mbpd) was recorded. This was lower than the daily average production of 2.00mbpd recorded in the same quarter of 2019 by -0.44mbpd and the third quarter of 2020 by –0.11mbpd.

“The total value of capital importation into Nigeria stood at $5,820.21m in the second quarter of 2019. This represents a decrease of -31.41% compared to Q1 2019 and +5.56% increase compared to the second quarter of 2018.

“The largest amount of capital importation by type was received through Portfolio investment, which accounted for 73.76% ($4,292.89m) of total capital importation, followed by Other Investment, which accounted for 22.41% ($1,304.43m) of total capital imported and Foreign Direct Investment (FDI), which accounted for 3.83% ($222.89m) of total capital imported in Q2 2019.”