Nigeria Unexpectedly Out Of Recession

Nigeria’s Gross Domestic Product (GDP) grew by 0.11 (year-on-year) percent in the fourth quarter of 2020 according to reports from the Nigerian Bureau of Statistics on February 18, implying an exit from recession for Africa's largest economy.

The surprising rebound means Africa’s largest economy may recover faster than expected as oil prices and output increase this year. It could also point to the growing dominance of the non-crude sector, according to Joachim MacEbong, a senior analyst at SBM Intelligence in Lagos.

Although weak, this data is a reflection of the effect of the return of economic activities after the easing of movement restrictions and limited local and international commercial activities in the preceding quarters.

READ MORE: Nigeria's Inflation Hits Highest Point Since April 2017 (DETAILS)

However, the Q4 2020 growth rate was lower than the growth rate recorded the previous year by -2.44% points. Overall, in 2020, the annual growth of real GDP was estimated at -1.92%, a decline of -4.20% points when compared to the 2.27% recorded in 2019, and the most since 1991 according to the International Monetary Fund (IMF).

Oil production fell to 1.56 million barrels a day in the fourth quarter from 1.67 million barrels in the previous three months. While crude contributes less than 10% to the country’s GDP, it accounts for nearly all foreign-exchange earnings and half of the government revenue in the continent’s biggest producer of the commodity.