Nigeria's GDP grows 3.9% in fourth quarter of 2021

Nigeria's Gross Domestic Product (GDP) showed a robust growth of 3.9% in the fourth quarter of 2021, marking the fifth consecutive quarter of positive growth since the 2020 recession. The annual growth rate for 2021 stood at 3.4%, outperforming projections made by both local and international economists. Bismarck Rewane, CEO of Financial Derivatives Company, provided valuable insights into the numbers and discussed the implications for Nigeria's economy moving forward. Rewane highlighted the positive aspects of the GDP growth in the fourth quarter, pointing out that 10 out of the 16 activities monitored by the National Bureau of Statistics showed expansion. Agriculture, in particular, demonstrated substantial growth, with an increase from 1.22% in the previous quarter to 3.58%. This significant uptick underscores the ongoing success of agricultural initiatives in the country. However, the oil sector continued to face challenges, with a contraction from -10% to -8%. This decline was attributed to Nigeria's inability to meet its oil production quota within OPEC, coupled with a decrease in petroleum revenues. Rewane emphasized the importance of the petroleum sector for driving the Nigerian economy and generating foreign exchange. Trade and manufacturing were identified as key sectors that experienced setbacks in the fourth quarter. Trade, which accounts for 16% of Nigeria's GDP, saw a contraction from 11.9% to 5.34%, primarily due to issues related to logistics and foreign exchange availability. Similarly, manufacturing output decreased from 4.29% to 2.28%, with manufacturers facing challenges in obtaining foreign exchange and dealing with declining consumer incomes. Looking ahead to 2022, Rewane expressed optimism about the prospects for economic growth in Nigeria. With the global economy beginning to recover and the demand for oil on the rise, there is potential for increased foreign exchange inflows and improved access to forex for traders and manufacturers. He also highlighted the role of the Central Bank in providing support to these sectors and indicated that efforts to boost foreign exchange reserves could further stimulate growth. Despite the positive outlook, challenges persist in the oil sector, with reports of oil theft and Nigeria's inability to meet production targets. However, Rewane pointed out that other sectors, such as financial services and insurance, have shown significant growth, providing a buffer for the economy. He stressed the importance of sustaining output levels and ensuring a stable forex environment to support continued economic expansion. In conclusion, while Nigeria's GDP growth exceeded expectations in the fourth quarter of 2021, there are pressing issues that need to be addressed to support sustained growth across key sectors. By focusing on enhancing forex availability, addressing sector-specific challenges, and fostering a conducive business environment, Nigeria can aim for more robust growth in the coming quarters.