In the fourth quarter, Africa’s largest economy suddenly emerged from recession, with growth in agriculture and telecommunications offsetting a dramatic decline in oil production.
The Abuja-based National Bureau of Statistics said on Thursday that gross domestic product increased 0.11 per cent from a year ago in the three months to December, compared to a 3.6 per cent decrease in the third quarter.
According to statistics from the International Monetary Fund, the economy contracted 1.92 per cent for the entire year, the most since at least 1991.
The surprising rebound means Africa’s largest economy may recover faster than expected as the oil price and output increase this year. It could also point to the growing importance of the non-crude sector.
“The fact that we have seen a recovery in non-oil GDP growth is positive,” said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank.
Oil production fell to 1.56 million barrels a day in the fourth quarter from 1.67 million barrels in the previous three months.
While crude contributes less than 10% to the country’s GDP, it accounts for nearly all foreign-exchange earnings and half of the government revenue in the continent’s biggest producer of the commodity.
The non-oil economy expanded by 1.7% from a year earlier, the strongest rate in four quarters, with agriculture growing 3.4% and telecommunications increasing 17.6%.
This is how Nigeria Agriculture sector managed to turn around the economy. The Nigerian central bank runs an Incentive-Based Risk Sharing System for Agricultural Lending, (NIRSAL PLC) that has facilitated over N148 billion in finance and investments for agriculture and agribusiness.
Aliyu Abdulhameed, Managing Director of NIRSAL said the company facilitated over N30 billion into the sector between January last year to date.
He said that despite the Covid-19 pandemic that disrupted the global economy last year, his organization had to continue working, saying, “the stomach does not know whether there is a pandemic or not.”
According to him, “In the course of the last 13 months, we facilitated the flow of over N30 billion into agricultural value chains from commercial banks and other sources.
“Even though our operations suffered a stall during the lockdown of 2020, our technological depth gave us a pathway to return to work while remaining safe and socially-distanced. As you know, it was important to continue, even increase, food and raw materials production as the pandemic bit harder,” he said.
As enablers of actors in the agricultural value chain, “we remained operational for those who were allowed by the Federal Government to move around to produce food and render essential services in the society.”
“By remaining operational, our numbers grew: As at fourth-quarter 2020 (Q4 2020), we had achieved the following: Facilitated over N148 billion in finance and investments for agriculture and agribusiness; aggregated over 3,000 agro geo-cooperatives with 500,000 farmers on nearly 800,000 hectares of land, and enrolled 1.4 million persons onto innovative insurance products designed by NIRSAL in collaboration with a consortium of agricultural insurance underwriters.”
The NIRSAL Managing Director added that the organisation had grown its balance sheet to N140 billion, equity by 1,415% and total assets by 87% through prudent management of its resources.
