Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 20)

Data from the National Bureau of Statistics (NBS) shows that Nigeria’s economy grew in real terms by 3.11 percent in Q1 2022.1 The growth rate is 2.6 percent points higher than the 0.51 percent growth rate recorded in Q1 2021 but 0.88 percent points lower than the 3.98 percent recorded in Q42021. Although there was a marginal decrease in real output growth, the quarter growth made it the sixth quarter of uninterrupted positive growth since the country exited the COVID-19 induced recession in Q4 2020. The non-oil sector grew by 6.08 percent and contributed about 93.37 percent of total output in the period under review. However, the oil sector contracted by 26.04 percent, and its share dipped to 6.63 percent in Q1 2022 from 9.25 percent in 2021. Persistent vandalism and illegal refineries are partly responsible for the declining contribution of the oil sector. Also, the electricity sector contracted by 11.2 percent, partly due to the frequent collapse of the transmission network in the period under review. For the Nigerian economy to have high and sustainable growth, the non-oil sector growth will need to be sustained to compensate for the contraction in the oil sector. Also, the country’s electricity generation and distribution need to be improved. The unreliable electricity situation partly contributes to the high cost of doing business and indirectly hinders growth.

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