Economy

Oil Price Recovery, Vaccination Driving Nigeria’s Economic Growth – Minister

Published

2 years ago

June 3, 2021

Nigeria’s recent economic growth is due to the return of international trade, recovery in oil prices and successful vaccination programmes, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.

Ahmed disclosed this in her address at the Federal Executive Council (FEC) meeting chaired by President Muhammadu Buhari at the Presidential Villa on Wednesday.

She stated that the Gross Domestic Product (GDP) growth of 0.51 percent in the first quarter of 2021 published by the National Bureau of Statistics (NBS) showed that the Nigerian economy was on the threshold of growth.

She explained that the 0.51 GDP growth reflected the second consecutive quarter of positive real growth, following two previous consecutive quarters of negative growth in Q3 and Q4 of 2020 and recession, which it exited in the fourth quarter.

This improved condition, according to Ahmed, was seen in positive economic growth in 23 out of 46 sectors in the first quarter of 2021, compared to 17 in the previous quarter.

The minister added that the gradual recovery of the nation’s economy could also be attributed to the return of business to normalcy after the lockdown brought about by the outbreak of the Coronavirus pandemic last year.

Ahmed said, “The agricultural sector posted strong growth at the rate of 2.28 per cent in the first quarter of 2021, compared to previous quarters. This growth in agriculture signifies the resilience of the agricultural sector.

“Also, the industry sector has recorded positive growth, even though a weak one, but the growth is a positive one and this marks the past quarter of growth over the past one year in the industry sector. Services recorded a slight dip, but a small one at 0.39 per cent.

“In addition to the economic activities and the reopening of our businesses, growth was also boosted, in fact by increase in crude oil prices as well as increase in production in the first quarter of 2020.”

“We have seen this positive growth being contributed by not just the oil sector, but also by economic activities within the metal sector, the cement sector, electricity, telecommunications, food and beverages as well as human health and social services,” she added.

She identified the sectors that recorded negative growth as quarrying and other minerals, oil refinery, road transport, air transport, rail transport, education, and accommodation and food services.

Commenting on inflation, the minister said, “Throughout 2020 and even three quarters, one year before 2020, airline inflation had maintained an upward trend.

“For the first time in 19 months, inflation has shown a slight dip. It’s a very slight dip, but it’s a positive point for us, we had indicated that our projection is that inflation will begin to flatten in the month of April 2021 and this is an indication.

“So subsequent periods, we are looking at inflation beginning to trend downwards. Food inflation will not come down as fast as the other aspects of inflation, but it is important to also see that the rate of food inflation also showed a slight dip and the rise in food index.

“You will see it if you check the detailed report, is driven by export foods such as coffee, tea, cocoa, bread, cereals, soft drinks, milk, cheese, not basic food items like rice, maize and millet.”