Q1 and Q2 GDP, Expenditure and Income Approach, Signals Recovery

October 20, 2021/CSL Research

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The National Bureau of Statistics (NBS) recently released Nigeria’s Gross Domestic Product (Income- Expenditure) report for Q1 and Q2 2021. Earlier, the output approach had placed the Q1 and Q2 growth at 0.5% and 5.0% year-on-year (y/y), respectively.

A few points from the recent report are highlighted below.

  • Real household consumption expenditure in Q1 and Q2 grew y/y by 43.7% and 48.16%. However, it recorded -4.86% growth in Q1 2020 and -17.95% growth over the corresponding second quarter of 2020. Overall, in 2020, real household final consumption expenditure was up 1.56% from -1.06% recorded in 2019. The observed trend in 2020 showed that real household consumption expenditure declined in Q1 and Q2 due to the COVID 19 pandemic. However, positive growth rates were recorded in Q3 and Q4 2020 as public interventions increased. In the first two quarters of 2021, household consumption has improved tremendously as the economy continues to recover.
  • Net exports remained negative (same as in Q3 and Q4 2020), as a negative y/y growth of 110.5% and 74.5% in Q1 and Q2 2021, respectively was reported.
  • National Disposable Income (NDI) declined, down y/y by 2.3% and 5.4% in Q1 and Q2 2021 respectively
  • Compensation of Employees was up y/y by 9.3% and 19.4% in Q1 and Q2 2021 in real terms

The economy continues to show recovery from the impact of the coronavirus outbreak. While we laud the efforts that have supported the economy back to this current state, we noted that the protracted structural issues that affect productivity still exists. In this light, we reiterate our age-long clamour for an improved business environment, improved road and production infrastructure, and a concerted effort at enabling seamless and optimal operations of the Port (Apapa and Onne, amongst others).

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