By Tony Obiechina, Abuja
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has attributed the strategic interventions of the federal government as the major reason behind non-oil sector GDP growth.
The minister made the disclosure while addressing a Press conference in Abuja on Monday even as the government is projecting 5 percent GDP growth at the end of 2021.
The National Bureau of Statistics had recently reported that Nigeria’s Gross Domestic Product grew by 5.01 per cent, year-on-year, in the second quarter of 2021.
According to the report, the 5.01 per cent means that Nigeria recorded a three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.
The Q2 2021 growth rate was higher than the -6.10 per cent growth rate recorded in Q2 2020 and the 0.51 per cent recorded in Q1 2021.
The report stated that with steady recovery observed since the end of 2020 the gradual return of commercial activity as well as local and international travel accounted for the significant increase in growth performance relative to the second quarter of 2020 when nationwide restrictions took effect.
Real GDP grew 2.70 per cent in 2021 compared to -2.18 per cent for the first half of 2020.
Speaking on the GDP figures, the minister stated that “Interventions in the non-oil sector have been really significant to growth.
“The non-oil sector is the chief driver of growth in GDP in the second quarter of 2021. The service sector grew by 9.2 per cent and this is the highest growth since the fourth quarter of 2014.
“The non-oil sector recorded its fastest growth since the third quarter of 2014 with a 7% growth which is an indication of the return of business and economic activity to pre-pandemic era.
“Our interventions in the Economic and sustainability plan especially in the area of transportation and services and the policy on ease of doing business has contributed significantly to growth which also validates the Projections of the International Monetary Fund that says global economy will grow at 4% in 2021.”
On the impact of the GDP figures especially at a time when food inflation is going up, the minister admitted the challenges associated with food inflation which is majorly insecurity.
She however stated that the impact of the GDP growth will be felt gradually especially now that headline inflation is gradually slowing.
Asked on the rate of borrowing, the minister clarified that the country is borrowing at 23% of GDP which is within the threshold.
She added that with 2.7% growth for the first half of 2021, there are positive indications that the country is heading for significant growth at the end of the year.
On the concerns raised by the Manufacturers Association of Nigeria (MAN) over the slow pace of growth of the sector and low GDP contributions, the minister said “We have been engaging with MAN especially with the signing of the AFCFTA to ensure that bottlenecks and challenges of production are addressed.
“We have come to realize that one of the key challenges of the Manufacturers is the unavailability of power, which is why the federal government initiated the Presidential Power initiative with Siemens with funding from the German government which is targeting 10,000 megawatts in the first phase and the second and third phase will follow suit.
“The ministry of finance and the Nigerian Customs Service are already working on an e-customs project that will enhance Efficiency of manufacturing sector and improve ease of doing business.
Asked on her expectations with the signing of the Petroleum Industry Act, the minister added that “The PIA is finally in place and the committee now has a year in implementing structures.
“Also with the coming of Dangote refinery and the Bua refinery hopefully, there will be huge Investments in he oil and gas sector which will expand growth of the oil and gas sector,”
Meanwhile, the Statistician General of the Federation, Dr. Simon Harry has projected that by the end of 2021, the country should be able to record about 5 per cent GDP growth.
While responding to a question during the briefing, Harry said “GDP figures are a result of careful research and aggregation. As you all know, economic activities are fully returning, so by the end of 2021, the country is expected to record tremendous growth and we are projecting overall GDP of over 5 per cent,” he added.