ICT Contribution Rise to 15% as Nigeria’s Real GDP Drops to N70 Trillion in 2020
The contribution of the Information and Communications (ICT) sector to Nigeria’s total GDP (Gross Domestic Product) increased to 15.05% in 2020.
Despite the economic situation caused by the pandemic, the sector had a total increase in growth of 12.9% after seeing positive growth in all quarters. This is according to full-year data recently released by the National Bureau of Statistics (NBS).
However, the total growth rate of the country’s GDP slipped for the first time since 2012. The rate dropped from 2.27% in 2019 to -1.92% in 2020.
The report shows that only 17 out of 46 Sectors recorded positive real growth in 2020. Oil refining and Air transport saw the highest decline with -62.2% and -36.9% respectively, while Quarrying and Telecommunications had the highest growth with 21.1% and 15.09% respectively.
is Nigeria exiting recession?
After the GDP dropped for the second consecutive time in Q3 2020, the country entered into recession. However, things appear to be changing as the NBS reported a positive growth of 0.11% in Q4 2020.
In Q4 2020, Nigeria’s GDP grew positively for the first time in the last 3 quarters
Though weak, the positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities, according to the NBS.
Nigeria’s real GDP falls to N70 trillion
Despite the growth, the country’s total GDP still fell below that of 2019. Reports show that the GDP fell from N71.38 trillion in 2019 to about N70 Trillion in 2020.
According to the NBS, the decline was caused mainly by the significantly lower levels of both domestic and international economic activity for most of the year
The low levels stemmed from the nationwide shutdown efforts aimed at containing the COVID-19 pandemic in the second quarter.
The drop in oil production – Nigeria’s main source of capital – also contributed to the decline of the GDP as the real growth of the oil sector declined by 8.89% in 2020. This is a huge drop from the 4.59% growth recorded in 2019.
For Q4, the oil sector contributed 5.87% to total real GDP, down from the corresponding period of 2019 and the preceding quarter, where it contributed 7.32% and 8.73% respectively.
However, the drop in Oil contribution was significantly covered by ICT. The sector contributed 15.06% to aggregate real GDP in Q4 2020, higher than in the same quarter of the previous year in which it represented 13.12% and higher than the preceding quarter, in which it represented 13.47%. This brings its totally contribution at the end of 2020 to 15.05%.
ICT made the second-largest GDP contribution after Agriculture (26.21%) in 2020
As a subsector, the Telecommunications and Information Services had a growth rate of about 17.64% in the fourth quarter, up from 17.36% in the previous quarter.
Summary
Despite the positive growth in GDP in Q4 2020, the economic situation on the streets isn’t getting better. The prices of foodstuff are still rising with rumours of a possible increase in fuel and electricity price on the horizon. This makes it difficult to believe that the economy is making positive growth.
Although the contribution of ICT and Agriculture was significant, the drop in growth across most sectors shows that more needs to be done to help the country’s economy recover.
Going forward, the continuous drop in the contribution of the oil sector to the country’s GDP calls for more efforts to be put into an alternative source of revenue like the thriving Agriculture and ICT sector.
