Nigeria’s economy emerged from recession in the fourth quarter of 2020, achieving its first gain in three quarters as the country’s coronavirus-related lockdown was lifted, according to a report released Thursday by the National Bureau of Statistics.
According to the data, GDP increased 0.11 percent from a year ago in the three months between October and December.
The economy dropped by 3.6 percent in the third quarter of 2020, after contracting by 6.1 percent in the second quarter, resulting in Nigeria’s second recession in five years.
The GDP contracted 1.92 percent in 2020, which was better than the International Monetary Fund’s forecast.
Although the growth was small, the NBS said Thursday that it represents the gradual restoration of economic activity following the relaxation of restricted movements and limited local and international business activities in previous quarters.
“As a result, while the Q4 2020 growth rate was 2.44 percent points lower than the previous year, it was 3.74 percent points better than Q3 2020,” according to the NBS.
Real GDP growth was 9.68 percent quarter over quarter in 2020, marking the second consecutive positive quarter over quarter growth rate following two negative quarters.
However, the annual growth rate of real GDP in 2020 is expected to be 1.92 percent, a drop of 4.20 percentage points from the 2.27 percent achieved in 2019.
Nigeria has been in recession how many times?
Nigeria’s economy has entered its second recession in five years, with the country’s gross domestic product contracting for the second quarter in a row.
According to the National Bureau of Statistics, the nation’s GDP grew at a negative rate of 3.62 percent in the third quarter of 2020.
In the second quarter, the country’s economy contracted by 6.10 percent.
It’s the country’s second recession since 2016, and the country’s worst downturn in nearly four decades.
The coronavirus pandemic has wreaked havoc on Nigeria’s economy, causing a large drop in oil earnings and halting global economic activity for months.
Despite contributing less than 10% to Nigeria’s GDP, crude oil accounts for approximately 90% of the country’s foreign exchange profits. According to the most recent statistics, it contributed only 8.73 percent to the economy.
According to Bloomberg estimates, oil production fell to 1.67 million barrels per day from 1.81 million barrels the previous quarter, the lowest since the third quarter of 2016, when the country was last in recession.
If the spread of COVID-19 is contained by the third quarter, the Nigerian economy will fall by 3.2 percent in 2020, according to the World Bank. The International Monetary Fund predicts a 4.3 percent decrease.
What caused Nigeria’s economic downturn?
USD/bbl. Nigeria’s economy unexpectedly emerged from recession in the fourth quarter, thanks to increases in agriculture and telecoms, which helped to offset a severe drop in oil production. According to estimates from the International Monetary Fund, the GDP lost 1.92 percent for the entire year, the most since at least 1991.
When did the 2020 recession begin?
According to the official documenter of economic cycles, the Covid-19 recession is one of the darkest but also the shortest in US history. The decline lasted only two months, according to the National Bureau of Economic Research, from February 2020 to April 2020.
How did Nigeria emerge from its economic crisis?
All five sub-sectors, including those that are still in contraction, saw significant improvement in their Real GDP Growth statistics.
- Crop Production’s GDP, for example, increased by 3.42 percent in the fourth quarter compared to 1.39 percent the previous quarter, virtually doubling quarter on quarter. Crop production accounts for a considerable amount of Nigeria’s GDP, and it accounts for the majority of it.
- Trade GDP, which accounts for 15.5 percent of total GDP, shrank by 3.2 percent in the third quarter, compared to a contraction of 12.12 percent in the previous quarter. This is an example of a sector that has vastly improved despite the fact that it is still in recession.
- In the fourth quarter of this year, the telecommunications sector rose by 17.64 percent, compared to 17.36 percent the previous quarter. The telecommunications sector has grown to become one of the largest in the economy, with a share of 12.2 percent. We feel that this sector is a major driver for Nigeria’s economic recovery.
- Finally, the Real Estate sector, which had been in decline since the second quarter of 2019, grew by 2.81 percent in the fourth quarter, bringing it out of recession.
- As a result, the GDP performances of trade, telecommunications, real estate, and crop production are the reasons we are no longer in recession.
How did Nigeria emerge from the recession?
Nigeria’s strong private sector defied expectations and took advantage of opportunities given by the coronavirus epidemic through technology and remote labor, helping the economy to emerge from recession in the fourth quarter with 0.11 percent growth.
Foreign exchange pressures, relatively lower oil prices and production, subdued global demand, spiraling consumer prices, repressed purchasing power, heightened unemployment levels, weak investor confidence, worsened insecurity, and social tensions are all concerns about the country’s structural problems.
According to figures released by the National Bureau of Statistics (NBS) yesterday, the country’s Gross Domestic Product (GDP) increased 0.11 percent from a year ago in the three months through December, compared to a fall of 3.6 percent in the third quarter.
What is Nigeria’s present economic crisis?
Inflation rates in Nigeria have been steadily rising in recent years, hitting their highest levels in four years, owing to skyrocketing food prices and low purchasing power.
Inflation increased to 18.17 percent in March 2021, up from 17.33 percent in February 2021. According to the Consumer Price Index report provided by the National Bureau of Statistics, this was 0.82 percent higher than February’s figures (NBS).
How did Nigeria emerge from its 2016 recession?
Nigeria’s economy is on the mend. The Nigerian economy had left recession by Q2’17, with a 0.5 percent y/y growth rate. The recovery was aided by a strong recovery in the oil sector, which was fueled by higher oil prices and production volumes.
What caused Nigeria’s economic downturn in 2016?
Experts argued at the time that the 2016 economic recession was caused by a huge drop in oil prices and bad management of the currency problem.
Is a recession expected in 2021?
Unfortunately, a worldwide economic recession in 2021 appears to be a foregone conclusion. The coronavirus has already wreaked havoc on businesses and economies around the world, and experts predict that the devastation will only get worse. Fortunately, there are methods to prepare for a downturn in the economy: live within your means.