The Centre for Promotion of Private Enterprises (CPPE), has stated that the 3.40 percent economic growth rate recorded by Nigeria in 2021 has been attributed to factors such as the N2.3 trillion Economic Stimulus Programme of the federal government that was meant to contain the impact of the COVID-19 on the economy.
The CPPE further attributed the economic growth recorded in 2021 to the strong base effect resulting from the fact that 2020 (the reference year) was a year of recession when the economy contracted by -1.92 percent.
Other factors, according to the CPPE, were the rebound in economic activities across all the sectors following the lifting of lockdown imposed in 2020, aggressive rollout of vaccines in 2021, and rebound in crude oil prices.
These were contained in the statement by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, in which he advised the government to prioritize key development indicators that impact positively on citizens’ welfare productivity in the economy to accelerate employment and reduce poverty.
Yusuf said: “According to the National Bureau of Statistics (NBS), Nigeria’s GDP grew by 3.40 percent in 2021, year on year. This marks the highest GDP growth rate since 2015. This growth performance is higher than projections by the IMF (2.6) and the World Bank (2.7).
“The quarterly GDP figures indicated that the economy grew by 3.98 percent in the fourth quarter of 2021. This was also the fifth consecutive quarterly GDP growth recorded in the economy.
“Economic Stimulus Programme of the government, encapsulated in the Economic Sustainability Plan also played a role in accelerating the recovery of the economy in 2021.
“The government introduced quite several interventions that impacted positively on those who benefitted from those interventions. Projected spending under the stimulus plan was N2.3 trillion.
“In other words, being a year and year comparative analysis, comparing 2021 with 2020 naturally resulted in a strong improvement in comparative performance. 2020 was the peak of the COVID-19 pandemic and the associated disruptions in the economy. The year ended with an output contraction of 1.8 percent.”
The report added: “The rebound of economic and business activities across all sectors of the economy as the pandemic effects progressively dissipates.
“There was a relaxation of restrictions, lockdowns, and reduction in the supply chain disruptions. These naturally impacted on domestic economic activities and global economic recovery.
“There was an aggressive rollout of vaccines in 2021, especially in the advanced economies which significantly boosted the sentiments of investors globally. This of course boosted investment and consequential growth both domestically and globally.
“Rebound in crude oil price: being an oil-producing country the rebound of crude oil price in 2021 impacted positively on growth performance.
“The average crude oil price was $70/barrel in 2021 against $42/barrel in 2020. Historically, there is a strong and positive correlation between oil price and economic growth in the Nigerian economy. The rebound of oil price was a key driver of 2021 growth.”
He said: “The last few years were characterized by worsening poverty situation, high inflationary pressures, massive erosion of purchasing power, high energy prices, escalating production cost, sharp currency depreciation and many more.
“These are critical developmental metrics on the basis of which the performance of the economy should also be measured. Therefore, going forward, policymakers should prioritize these key development indicators.
“Citizens’ welfare and investment productivity in the economy matter even more than the GDP numbers.”
Yusuf also highlighted the sectors that recorded positive growth rate during the period under review, which included agriculture, food and beverage, cement and chemical and pharmaceutical and the vehicle assembly subsectors at 2.13, 5.73, 6.6, 8.13 and 2.3 per cents respectively while trade and rail transport and pipelines grew at 8.0 and 36.95 per cents respectively.
He attributed the decline in crude oil production to, “intractable oil theft and vandalization of pipelines; divestment by oil majors from the upstream oil sector; lack of political will on the implementation of the Petroleum Industry Act, which weakened investors’ confidence and rapidly evolving global energy transition, making it difficult for fossil fuel investments to attract funding.”
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