•FG, others contribute N1.46trn
•Far below their FAAC allocation by 80.4%
By Babajide Komolafe, Economy Editor
The public sector comprising the Federal Government, 36 states and 774 local governments with their agencies, contributed N1.46 trillion to the nation’s real Gross Domestic Product, GDP, in 2021, representing a marginal decline of 0.3 per cent from the N1.47 trillion contributed in 2020.
However, the contribution of the public sector is 80.4 per cent lower than the N7.46 trillion total allocation received by the three tiers of government from the Federation Account in 2021.
Furthermore, Vanguard Public Finance analysis of the National Gross Domestic Product, GDP, Q4 2021 report of the National Bureau of Statistics, showed that the contribution of the public sector to the real GDP, dropped slightly by seven basis points to 2.03 per cent from 2.10 per cent in 2020.
The decline to the real GDP, followed three consecutive quarterly contractions recorded in 2021. According to the NBS report, the public sector in real terms recorded year-on-year, YoY, contraction in Q1, Q2, and Q3.
In Q1’21, the sector recorded 0.88 per cent, YoY, contraction to N278.24 billion from N280.72 billion in Q1’2020.
This trend continued in Q2 with 1.68 contraction to N368.2 billion from N374.51 billion in Q2’2020, and 0.15 per cent contraction in Q3’21 to N380.34 billion from N380.9 billion in Q3’2020.
The sector however returned to growth in Q4’21, with N440.44 billion GDP, representing 1.13 per cent increase from N435.52 billion in Q4’2020.
In its review of the performance of the sector in Q4’21 and full year 2021, the NBS report stated: “In nominal terms, the Public Administration sector grew by 1.77% in Q4 2021, lower by 2.70% points from the corresponding quarter of 2020 and lower by 0.70% points relative to Q3 2021. Quarteron-Quarter, the sector grew by 14.30%, while annual growth was 1.22% in 2021.
“The contribution of Public Administration to Nominal GDP stood at 1.83% in Q4 2021, lower than the 2.04% recorded in Q4 2020 by 0.20% points and higher than the 1.75% recorded in Q3 2021 by 0.08% points. Annual contribution in 2021 stood at 1.73%.
“In real terms, the sector recorded a growth rate of 1.13% (year on year) in Q4 2021, lower by 0.67% points and higher by 1.28% points from the Q4 2020 rate and the Q3 2021 rate respectively.
“On Quarter on Quarter, the sector grew by 15.80% in Q4 2021, while annual growth rate stood at – 0.30%.
“The contribution of Public Administration to Real GDP stood at 2.17% in Q4 2021, lower compared to 2.23% in Q4 2020 and higher from 2.05% in Q3 2021. The sector contributed 2.03% to real GDP in 2021.”