The Nigeria Bureau of Statistics (NBS) has recently released GDP result for the first quarter of 2021, revealing that the economy expanded by 0.51% YoY (Q4: +0.11% YoY).

Researchers from Alpha Morgan Capital highlight that this is the second consecutive quarter of growth following the negative growth recorded in the third and fourth quarters of 2020, respectively.

Although the non-oil sector (+0.79% YoY) remained the major driver for the overall growth, ttey stressed that the expansion was slower relative to the previous quarter (+1.69%). The slower growth was driven by the agriculture sub-sector (+2.28% YoY vs 3.42% YoY in Q4 2020) following the insecurity issues in the country’s northern part, which impacted output.

They also highlight the slower growth recorded in the service sub-sector (+0.46% YoY vs 3.22% YoY in Q4 2020). The slower growth was buoyed by ICT as the segment recorded a 6.47% YoY expansion vs 14.95% YoY in the previous quarter.

The moderation in growth they stated, was driven by the decline in the number of telephone subscribers over the quarter (-5.9% YoY to 192 million). Although the trade sector logged negative growth of 2.43% YoY, they highlight that the pace of decline was slower than the previous quarter, linking the further contraction to FX liquidity constraint and naira depreciation.

Other sub-sectors in the non-oil space recorded positive growth including construction (+1.42% YoY), water supply and sewage (+14.75% YoY) and the manufacturing sector (+3.40% YoY). In the oil sector, activities on that front contracted due to the decline in oil production over the period.

For context, average daily production declined by 0.35mbpd to 1.72mbpd. This they attributed the decline in oil production to increased compliance to the OPEC+ production cut. Consequently, oil GDP contracted by 2.21% YoY.

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