Financial Sector, ICT, Trade Drive GDP Growth To 3.4%, Highest In 7 Years - NBS

The country’s Gross Domestic Product (GDP) grew by 3.4 percent, the highest since President Muhammadu Buhari took over from the PDP administration led by Goodluck Jonathan, the National Bureau of Statistics (NBS) reported.

The renowned economist and former member of President Muhammadu Buhari's economic recovery team congratulated the country on exceeding the 2.6 percent average population growth rate.

The Report

• In the second quarter (Q2) of 2021, real GDP increased by 5.01 percent, the highest quarterly growth rate in recent years. Thereafter, the trend started flattening as the country recorded 4.01 percent in the third quarter (Q3).
• The Q4 data shows that the growth momentum may have been on a downtrend (otherwise interpreted as slower growth) with the average performance of the economy pegged at 3.98 percent.
• Overall, both Q4 and full-year performances were driven by impressive growth in the service sector. Financial institutions, trade, and telecommunications, for example, experienced growth ranging from 7.28 percent to 10.53 percent.
• Financial institutions, trade, and telecommunications contributed 31.1 percent, or N22.83 trillion. The entire economy's service sector contributed 53.56 percent, while agriculture and industry contributed 25.88 percent and 20.56 percent, respectively.

Breakdown

• The months of April to June 2021, saw the nation record its highest economic growth rate in recent years. This was in manufacturing, ICT, banking, especially the Fintech industry, and other service sectors, which experienced not only intense government funding but also increased local customer patronage.
• Despite structural challenges coming from falling national income, security challenges, and capital flight, the GDP still refused to fall harder than anticipated in the fourth quarter (Q4). This fall was witnessed as the average performance of the economy declined by 3.98 percent.
• Throughout 2021, the service sector was championed by the financial sector, especially with the huge growth in FINTECH and commercial banks competing with firms such as OPAY, FAIR MONEY, and others. This healthy competition helped drive growth, as employment and revenue grew in these sectors.
• Financial institutions, trade, and telecommunications increased by 7.28 percent, 10.53 percent, and 10.53 percent, respectively.
• Financial institutions, trade, and telecommunications contributed 31.1 percent, or N22.83 trillion.The entire economy's service sector contributed 53.56 percent, while agriculture and industry contributed 25.88 percent and 20.56 percent, respectively.
• The above result means that the government, through the CBN, Ministry of Finance, Bank of Industry, and other agencies, needs to drive sectoral funding to these sectors. They have the potential to reduce the nation’s dependence on crude oil.