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Nigeria’s GDP grows by 0.51% in Q1, 2021– NBS

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In spite of the slower pace of economic activities in the first quarter of the year (Q1, 2021), GDP grew by 0.51 per cent year-on-year, the National Bureau of Statistics (NBS) says.

The NBS said this in the Nigerian Gross Domestic Product (GDP) Report for Q1 2021,  released on its website on Sunday in Abuja.

The bureau said this marked two consecutive quarters of growth, following negative growth rates recorded in the second and third quarters of 2020.

It said the Q1 2021 growth rate was slower than the 1.87 per cent growth rate recorded in Q1 2020 but higher than 0.11 per cent recorded in Q4 2020, indicative of a slow but continuous recovery.

“Nevertheless, quarter on quarter, real GDP grew at -13.93 per cent in Q1 2021 compared to Q4 2020, reflecting a generally slower pace of economic activities at the start of the year.”

The NBS said that in the quarter under review, aggregate GDP stood at N40.01 trillion in nominal terms.

It added that this performance was higher when compared to the first quarter of 2020 which recorded aggregate GDP of N35.64 trillion, indicating a year on year nominal growth rate of 12.25 per cent.

Also, the nominal GDP growth rate in Q1 2021 was higher, relative to 12.01 per cent growth recorded in the first quarter of 2020 as well as the 10.07 per cent growth recorded in the preceding quarter.

The NBS classified the Nigerian economy into oil and non-oil sectors.

For the oil sector, in Q1, average daily oil production stood at 1.72 million barrels per day (mbpd).

This was lower than the average daily production of 2.07mbpd recorded in the same quarter of 2020 by 0.35mbpd but higher than the production volume of 1.56mbpd recorded in Q4 2020.

It added that the real growth of the oil sector was –2.21 per cent (year-on-year) in Q1, indicating a decrease of –7.27 per cent relative to the growth rate recorded in the corresponding quarter of 2020.

“Compared to Q4 2020 which recorded –19.76 per cent growth rate, growth in Q1 was higher by 17.55 per cent.

“Quarter-on-quarter, the oil sector recorded a growth rate of 35.65 per cent in Q1.

“In terms of contribution to aggregate GDP, the oil sector accounted for 9.25 per cent of aggregate real GDP in Q1, slightly lower than 9.5 per cent recorded in the corresponding period of 2020 but higher than in the preceding quarter, where it contributed 5.87 per cent.”

The NBS said the non-oil sector grew by 0.79 per cent in real terms in Q1, which was –0.75 per cent lower compared to the rate recorded in the same quarter of 2020 and -0.89 per cent lower than rates recorded in Q4 2020.

However, growth in the non-oil sector was driven mainly by the Information and Communication (Telecommunication) sector.

Other drivers were agriculture (crop production), manufacturing (food, beverage and tobacco), real estate, construction, human health and social services.

It said that in real terms, the non-oil sector accounted for 90.75 per cent of aggregate GDP in Q1, higher than its share in Q1 2020 which was 90.50 per cent but lower than 94.13 per cent recorded in Q4 2020.

The bureau explained that Quarterly National Accounts (QNA) were an integrated system of macroeconomic accounts designed to describe the entire system of production in a nation on a quarterly basis.

They provided a picture of the current economic status of an economy on a more frequent basis than Annual National Accounts (ANA).

In providing a reasonable level of detailed information of the economy, QNA allowed the government to regularly access, analyse and monitor economic developments.

The News Agency of Nigeria (NAN) reports that Nigeria’s GDP  recovered from recession in Q4 2020 by 0.11 per cent, from the 6.11 per cent contraction it recorded in Q3 2020. (NAN)

 

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Business & Economy

Tinubu Rules Out Fuel Subsidy Return, Says Nigeria Cannot Go Back to ‘Egypt’

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President Bola Ahmed Tinubu
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President Bola Tinubu has ruled out any return to petrol subsidy, insisting that the removal of the policy was necessary to prevent Nigeria’s economy from sliding into bankruptcy.

The President reiterated his position on Monday during a meeting with members of the City Boy Movement, a youth-driven political and advocacy group, where he defended the economic reforms introduced by his administration.

Tinubu said the government could no longer sustain the financial burden of subsidising petrol, arguing that the country lacked the resources required to continue funding the scheme.

“I came, and I removed the subsidy on my first day. Nigeria would have gone bankrupt; there was nothing left to pay for subsidies,” he said.

Using a biblical and Quranic analogy to underscore his position, the President declared that reversing the policy would amount to returning to an unsustainable economic system.

“When Moses (Musa) left Egypt, the Red Sea parted and gave way. You cannot ask Moses to go back to Egypt. With your energy and support, we will never go back to Egypt,” he stated.

The removal of petrol subsidy, announced during Tinubu’s inauguration on May 29, 2023, marked a major shift in Nigeria’s fiscal policy. The decision significantly increased petrol prices and contributed to mounting pressure on household incomes, transportation costs and businesses.

Petrol prices, which were below ₦200 per litre before the policy change, have since risen substantially, with prices reported at between ₦1,350 and ₦1,405 per litre across major filling stations.

The resulting increase in energy and transportation costs has continued to fuel public concerns over inflation, declining purchasing power and the overall cost of living.

However, the Federal Government has maintained that subsidy removal is critical to reducing fiscal pressure, improving public revenue and creating room for investment in infrastructure and other priority sectors.

Tinubu acknowledged the political contest surrounding the policy, noting that his opponents had promised to restore fuel subsidy. He nevertheless maintained that his administration would not reverse the reform.

Beyond defending the policy, the President urged members of the City Boy Movement to mobilise support for his administration by communicating its achievements and future plans to young Nigerians across campuses, markets and rural communities.

He also encouraged eligible young people to obtain their Permanent Voter Cards (PVCs) and participate in the electoral process.

The debate over fuel subsidy remains a central issue in Nigeria’s economic policy, with the government defending the reform on fiscal sustainability grounds while households and businesses continue to grapple with the effects of higher fuel prices.

 

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FG Rules Out Electricity Tariff Hike, Targets 24-Hour Power Supply

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Power Station and Meters
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The Federal Government has ruled out any plan to increase electricity tariffs, saying its priority is to improve power supply and ensure reliable electricity across the country.

The Minister of Power, Joseph Tegbe, gave the assurance in Ibadan, Oyo State, on Thursday, amid concerns and speculation about a possible increase in electricity tariffs.

Tegbe spoke during the groundbreaking ceremony for five interconnected mini-grid projects with a combined generation capacity of 17.7 megawatts and a 17.74-megawatt-hour Battery Energy Storage System (BESS).

“I want to say this clearly and without ambiguity: there is no plan to increase electricity tariffs. What we are planning is a power sector that works around the clock. Our commitment is 24/7 power,” the minister said.

He urged Nigerians to disregard reports suggesting an impending tariff hike, stressing that the government was focused on improving electricity generation, transmission and distribution.

The five mini-grid projects are located in Bola, Jiboye, Molade-Adelubi, Ogo Oluwa and Sooko-Elega. They are expected to provide electricity to communities across Akinyele, Ido, Ibadan North, Egbeda and Lagelu Local Government Areas of Oyo State.

According to the minister, the projects are designed to expand electricity access, reduce dependence on petrol and diesel-powered generators, and create a more favourable environment for businesses, investment and job creation.

Tegbe said the Federal Government was also implementing a broader energy strategy aimed at improving electricity supply through designated energy corridors, including the Lagos-Ogun, Abuja-Kaduna-Kano and Benin-Enugu-Port Harcourt corridors.

He added that efforts were underway to strengthen the national grid and upgrade generation and transmission infrastructure across the country’s eastern, western and central corridors.

The minister described the mini-grid initiative as part of President Bola Tinubu’s Renewed Hope Agenda, noting that similar electricity interventions had been implemented in communities across several states with support from the Rural Electrification Agency (REA).

He commended Tinubu for his leadership and acknowledged the contributions of the REA, project developer Paras Energy and Natural Resources Development Limited, the World Bank and the Ibadan Electricity Distribution Company.

Tegbe also recognised the Oyo State Government, traditional rulers and other stakeholders for their roles in facilitating the projects.

The initiative is expected to improve electricity reliability in the beneficiary communities, support local economic activities and reduce energy costs for households and businesses.

 

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Oyedele Warns Against New Taxes, Urges Governments to Explore Revenue Alternatives

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President Bola Ahmed Tinubu
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Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has cautioned governments against imposing new taxes or increasing the tax burden on vulnerable citizens and productive sectors amid economic pressures.

Oyedele spoke on the sidelines of the 2026 annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok, Thailand, where he presented the communiqué of the Intergovernmental Group of Twenty-Four (G24), which he chairs.

The minister said governments should prioritise identifying areas of savings, improving revenue mobilisation and strengthening fiscal management rather than introducing additional tax burdens that could further strain households and businesses.

“This is the wrong time to impose new taxes or increase the burden of tax, particularly on the vulnerable population and productive sectors of the economy,” he said.

Oyedele made the remarks while responding to questions on how developing countries could reduce debt-servicing costs without cutting essential public expenditure.

He urged governments to look inward for savings and explore more efficient ways of generating revenue while protecting vulnerable populations from further financial pressure.

On public borrowing, the minister said debt financing remained necessary to support economic growth but stressed that borrowed funds should be deployed to stimulate job creation and promote inclusive development.

He noted that governments should prioritise limited public resources for essential services, including healthcare and education, while leveraging private capital to support other investment needs.

Oyedele also cautioned against treating taxation and borrowing as mutually exclusive options, explaining that both have economic implications and must be carefully balanced.

According to him, excessive taxation of vulnerable households could reduce their capacity to afford basic necessities, including food, healthcare and education.

He described public debt as a future tax burden, emphasising the need for governments to adopt fiscal policies that balance present revenue needs with long-term economic sustainability.

“Debt is future taxes, so it’s not one or the other. It’s to strike a balance, bearing in mind ultimately that the essence of tax and of debts is to cater for the people,” he said.

The minister’s remarks underscore the need for developing economies to strengthen domestic revenue mobilisation, improve public spending efficiency and manage debt sustainably without undermining household welfare or productive economic activities.

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