Nigeria’s Gross Domestic Product (GDP) grew by 5.01 per cent in the second quarter of this year, the National Bureau of Statistics (NBS) said in its report on Thursday.

In the Nigerian Gross Domestic Product Report – Q2 2021, the Bureau said the leap represents the third consecutive quarters of real terms growth after the negative growths of second and third quarters of last year.

The NBS said in the Report: “Nigeria’s GDP grew by 5.01 per cent (year-on-year) in real terms in the second quarter of 2021, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.”

Two experts – Lagos Chamber of Commerce and Industry (LCCI) Director-General Dr. Chinyere Almona and an Economist/Private Sector Advocate Dr. Muda Yusuf, said the development portends brighter future for the economy. They reacted separately.

The 5.01 per cent GDP growth is a sign of incremental economic recovery, Yusuf said.

“The GDP growth of 5.01 is a welcome development and signposts an incremental recovery in the economy. It also reflects a gradual normalization of economic and business activities in the country,” he added.

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According to the LCCI, “This is a strong and a more desirable growth when we look at the non-oil growth of 6.7 per cent year-on-year compared with the 0.79 per cent in Q1. This shows an increase in non-oil sector activities through growth in trade, information and communication (telecommunication), transportation (road transport), electricity, agriculture (crop production) and manufacturing (food, beverage & tobacco).

The NBS said the Q2 2021 growth rate was higher than the -6.10 per cent growth rate recorded in Q2 2020 and the 0.51 per cent recorded in Q1 2021 year-on-year, indicating the resumption of business and economic activities.

It said the Year-to-date, real GDP grew 2.70 per cent in 2021 compared to -2.18 per cent for the first half of 2020. NBS said nevertheless, quarter-on- quarter, real GDP grew at -0.79 per cent in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.

On aggregate growth, the report said in the quarter under review, aggregate GDP stood at N39.1 trillion in nominal terms, higher than the second quarter of 2020 with aggregate GDP of N34.02 trillion, indicating a year-on-year nominal growth rate of 14.99 per cent. NBS however said that in second quarter 2021, real GDP was N16.69 trillion.

NBS added: “The nominal GDP growth rate in Q2 2021 was higher than -2.80 per cent growth recorded in the second quarter of 2020 when economic activities slowed sharply at the outset of the pandemic.”

“The Q2 2021 nominal growth rate was also higher than 12.25 per cent growth recorded in Q1 2021.”

On oil sector, the report noted that in the second quarter of 2021, average daily oil production stood at 1.61 million barrels per day (mbpd), which is -0.19mbpd lower than the average daily production of 1.81mbpd recorded in the same quarter of 2020 and -0.10mbpd lower than the 1.72mbpd recorded in the first quarter of 2021.

It said real growth of the oil sector was –12.65per cent (year-on-year) in Q2 2021 indicating a decrease of –6.02per cent points relative to the growth rate recorded in the corresponding quarter of 2020.

According to NBS, growth decreased by -10.44per cent points when compared to Q1 2021 which was –2.21 per cent.

The report said the non-oil sector grew by 6.74 per cent in real terms during the reference quarter (Q2 2021).

The Q2 2021 growth rate, it said, was higher by 12.80 per cent points compared to the rate recorded in the same quarter of 2020 and 5.95 per cent points higher than the first quarter of 2021.

During the quarter, the sector was driven mainly by growth in trade, information and communication (telecommunication), transportation (road transport), electricity, agriculture (crop production) and manufacturing (food, beverage & tobacco), reflecting the easing of movement, business and economic activity across the country relative to the same period a year earlier.

It said in real terms, the non-oil sector contributed 92.58 per cent to the nation’s GDP in the second quarter of 2021, higher from shares recorded in the second quarter of 2020 which was 91.07 per cent and the first quarter of 2021 recorded as 90.75 per cent.

Reacting to the latest NBS report, Yusuf said the economy grew 2.70 per cent year-to-date compared to -2.18 percent for the first half of 2020.

He said: “Nigeria’s Gross Domestic Product GDP grew by 5.01 per cent (year-on-year) in real terms in the second quarter of 2021, marking three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

“The Q2 2021 figure was a comparison with the worst contraction the economy suffered in recent history, which was 6.3 per cent in Q2 2020. This was the period the economy was completely shut down because of the pandemic. Economic activities were completely crippled; movement was restricted, supply chains collapsed etc.  ”The 5.01 per cent GDP growth is largely an indication of the restoration of economic activities.  The Nigerian economy is still essentially in a recovery phase. The major drivers of the growth numbers are not significant contributors to the GDP, except the trade sector.

“It is worthy of note that road transportation grew by 92 per cent; Rail g by 53 per cent; electricity, gas and steam and air conditioning, 78 per cent; coal mining, 34 per cent; trade,  22 per cent,  water and waste management,  18 per cent; insurance,  15.7 per cent   and strangely, other financial institutions contracted by 4.5 per cent.  Telecommunications grew by six per cent; music and motion pictures,  five per cent; health and social services five per cent; manufacturing,  3.5 per cent.”

The economist advised on the need to fix issues around regulatory environment, tax environment and the multitude of levies imposed on businesses by all levels of government; foreign exchange policies, ports environment,  and other structural bottlenecks to productivity in the economy.

On the challenges, he said there are still worries about the macroeconomic challenges reflecting in spiralling inflation, weakening of the currency, forex market illiquidity, spiking debt profile, among others. He decried the security situation in the country stating that it remains a major source of risk inhibiting investments whether domestic or foreign.