Gradual Economic Growth, Sign of Normalcy Returning to Business Operations, Says FG

The federal government has stated that the slow, but gradual economic recovery process indicates that business operations are returning to normal, and that restrictions of movements and commercial activities have been relaxed after extended lockdowns in 2020.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who stated this in her presentation of the 2021 gross domestic product (GDP) results and other performance indicators to the Federal Executive Council (FEC).

According to Ahmed, the improved economic condition in the country was indicated by the fact that 23 out of 46 activities recorded positive growth in the first quarter of 2021, compared to 17 in the previous quarter.

She stated that the first quarter performance marked the second consecutive quarter of positive real GDP growth following two previous back-to-back quarters of negative growth in 2020 (Q3 and Q4), which saw the country go into recession.

Recalling the quick exit from recession in the fourth quarter of 2020, she noted that the National Bureau of Statistics (NBS) released its Q1 result last week, which estimates and report show that the GDP grew to 0.51 per cent year-on-year (YoY) in real terms in the first quarter of 2021.

According to her, there is a further illustration that the slow, but gradual recovery process is indicative of the fact that business operations are returning to normal and that restrictions of movements and commercial activities have been relaxed after extended closedown in the 2020.

The minister, in a statement by her Special Adviser, Media and Communications, Yunusa Tanko Abdullahi said: “The agricultural sector posted a 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.

“The industrial 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 industrial sector. Services recorded a slight dip, but a small one at 0.39 per cent.”

The minister noted that in addition to the economic activities and the reopening businesses, growth, was also bolstered by increase in crude oil prices as well as production increase in the first quarter of 2020.

The contribution to this positive growth, she added, was not just by 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 noted: “On the other hand, there have been some sectors that are recorded negative growth and these sectors include quarrying and other minerals, oil refinery, road transport, air transport, rail transport, education, as well as hotel that is accommodation and food services.

“Amidst the global pandemic, which is gradually improving, and the return of international trade, recovery in oil prices and successful vaccination programmes across the world are contributing to favourable results in most economies.”

On inflation, Ahmed noted that throughout 2020 and even three quarters of the preceding year, headline inflation had maintained an upward trend, adding that for the first time in 19 months, inflation has shown a slight dip.

Subsequently, she stated: “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.

“The rise in food index, according to her, is driven by export foods such as coffee, tea, cocoa, breads, cereals, soft drinks, milk, cheese, not basic food items like rice, maize and millet.”