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Despite exiting recession, Nigeria’s overall GDP declines -1.9%

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*Records negative balance of trade

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By Elizabeth Adegbesan

Despite the reversal of the negative growth trend in the fourth quarter of 2020, Nigeria’s overall gross domestic product, GDP, remained in the negative for the full year.

The National Bureau of Statistics, NBS, yesterday disclosed that the economy recorded an overall GDP growth rate of -1.9 percent year-on-year (YoY) which was a huge downturn against positive 2.3 percent recorded in 2019.

Nigeria’s economy had entered recession in the third quarter of 2020 when the GDP recorded a negative growth of -3.62 percent, second consecutive quarterly negative growth after the -6.1 recorded in the second quarter, 2020.

The NBS also disclosed that exports and imports of goods and services fell by 27 per cent and 23 per cent respectively during the period.

Due to declining rates of growth in exports and imports, a negative balance of trade (-30%) was also recorded during the period.
In its Nigerian GDP Report (Expenditure and Income Approach for first, second, third, and fourth quarters of last year, Q1, Q2, Q3, and Q4, 2020),

The NBS stated: “In Q3’20, Nigeria’s real GDP at basic prices grew by -3.62 percent on a year on year basis, marking a second consecutive quarter of negative real GDP growth after -6.10 percent recorded in Q2’20. In Q4’20 however, growth turned positive, recording 0.11 percent in Q4 YoY.

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“Nevertheless, the negative quarterly growth rates recorded in Q2 and Q3 2020 resulted in annual growth rate of -1.92 percent for 2020, compared to 2.27 percent recorded in 2019.”

On exports, the bureau said: “In Q4’20, real exports grew by -42 percent and -58 percent, year on year, resulting in an annual growth rate of -27 percent, or 42 percent points lower than 15 percent recorded in 2019.

“Quarter on quarter, QoQ, however, growth in real exports remained negative from Q1’20 to Q4’20.”

Similarly, on exports it, stated: “Imports of goods and services also declined in real terms, recording -23 percent in Q3 and -40 percent in Q4.

“On an annual basis, however, the real growth of imports was worse than 2019, at -23 percent in 2020 compared to 27 percent in the previous year.

“On a QoQ basis, imports grew by 16 percent in Q3 but declined -4 percent in Q4’20.”

“Due to declining rates of growth in exports and imports in 2020, the growth in net balance of trade (or net exports) was negative in Q3 and Q4 2020.

“On a YoY basis, the net trade balance recorded -52 per cent growth rate in real terms in Q3 and -73 per cent growth rate in Q4.

“This resulted in an annual growth rate of -30 percent in real terms.”

Vanguard News Nigeria

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