Dear Subscriber,

The Nigerian economy grew at a much faster pace than analyst expectations. Real GDP expanded by 3.98% in Q4’21, annualized at 3.4%. The CBN and IMF had estimated more modest projections of 3.1% and 2.6% respectively. The annual growth rate of 3.4% is higher than the population growth of 2.6%,  which means that GDP per head will increase for the first time in many years.

This impressive Q4 GDP growth was largely due to base effects, harvests and reduced COVID restrictions. The agric sector in particular grew by 3.58%, almost twice as much as in the previous quarter. However, some of the key sectors of the economy are showing signs of weakness. For example, manufacturing activities have been affected by shortages in forex supply amongst other constraints.

The sustained positive growth trend and the marginal decline in inflation will be major considerations at the MPC meeting in March. This will embolden the hawks in the MPC. The committee had maintained status quo 27 times in the last 3 years.

In the download, the FDC Think-Tank analyzes the GDP numbers for Q4 and its implications.

Do enjoy your read…….