Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed said with the 5.01 percent year-on-year GDP growth in the second quarter of 2021, the economy was gradually returning to pre-pandemic level but warned that Nigerians may not begin to feel the positive impact of economic growth until it becomes higher than population growth.
At a press conference organized by Minister of Information and Culture, Alhaji Lai Mohamed on Monday for her to espouse on the recently released figures by the National Bureau of Statistics, Ahmed said “the 2021 Q2 growth rate reflects much better economic performance compared to the same period last year, which recorded -6.10% growth rate.
“Furthermore, it was also better than the previous quarter (Q1) growth rate of 0.51%, on a year-on-year basis. Year to date, real GDP grew 2.70% in 2021 compared to -2.18% for the first half of 2020.”
She expressed confidence that the economy would grow by at least 3% in 2021.
“Growth in Q2 2021 would have been much stronger had it not been for Agriculture recording slower growth at 1.30% due to several bottlenecks currently negatively affecting the sector and due to the industrial sector contracting by 4.23% largely due to the over 12% contraction in Crude Oil and Natural Gas Production.
“Nevertheless, the non-oil sector was a major driver of growth during the quarter, recording a growth rate of nearly 7% which represents the fastest growth in the non-oil sector since Q3 2014.
“Specific activities which recorded growth during the quarter Include: Trade, Transportation, Coal mining, Metal ores, as well as Insurance, each of which recorded double-digit growth.
“The report, however, also indicates that some activities such as oil refining, crude petroleum and natural gas production as well as financial services recorded negative quarterly growth. Overall, a total of 42 out of 46 economic activities expanded during the quarter compared to only 13 at the same time last year, while 37 activities performed better than they did last quarter (Q1).”
The Minister disclosed that she would lead a delegation on a road show by the third week of September 2021 to Lagos, London and New York for the Eurobond portion of external borrowing required to fund the 2021 budget.
She however, dismissed fears that mounting debts would constitute a headache for future managers of the economy as they were being spent on “critical infrastructure” that will create needed jobs.
Ahmed also gave the assurance that by 2022, Federal Government will begin to reduce borrowing to conform with the Fiscal Responsibility Act.
On release of capital components of budgets, the Minister said the N2.4 trillion allocations in the 2020 budget was fully released while N1.4 trillion had so far been released for the 2021 budget.
She also said the administration was embarking on some reforms that will catapult the economy from its current level to one that will create jobs and employment.
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