Despite 5.5% economic and financial growth, insurance contract of 2.48% in Q2

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Despite a real output growth rate of 5.01% to 16.69 trillion naira (or US $ 111.08 billion) as it recovered faster from last year’s recession.
The financial and insurance sector contracted by -2.48% during the semester, compared to -0.46% in the first quarter of 2021 and 18.49% in the semester of 2020, announced the National Bureau of Statistics (NBS). .

In a report, NBS said the insurance industry in the financial and insurance industry grew 15.68% in the half of 2021, compared to -4.58% in the first quarter of 2021 and 29.53 % in the second quarter of 2020.

However, other financial institutions in the financial and insurance sector contracted by -4.54% in the second quarter of 2021, compared to 0.15% in the first quarter of 2020 and 28.41% in the second quarter of 2020.

According to the report, the contribution of finance and insurance to real GDP amounted to 3.72%, lower than the 4.00% recorded in the second quarter of 2020 of –0.29% point, and the 3.77% recorded in the first quarter of 2021 by -0.05 percent.

The two sub-sectors accounted for 87.92% and 12.08% of the sector in real terms in the second quarter of 2021.

Overall, the financial services and insurance sector grew -1.86 percent in nominal terms (year-on-year), with financial institutions advancing -3.93 percent while insurance recorded a growth rate of 16.41 percent.

According to the report, the overall rate was –22.68 percent and -4.01 percent lower than in the second quarter of 2020 compared to the previous quarter.

Quarterly growth was -3.45 percent while the sector’s contribution to aggregate nominal GDP was 3.21 percent in the second quarter of 2021, lower than the 3.76 percent it represented a year earlier , and the 3.25 percent contribution it made in the previous quarter.

The SNB said the growth of this sector in real terms was -2.48%, down -20.97% from the rate recorded in the second quarter of 2020 and -2.02 points from the rate recorded in the previous quarter.

In the first half of the year, financial and insurance services growth stood at -1.47% year-on-year, compared to 19.63% year-on-year for 2020. Quarterly growth in real terms was – 2.18%. .

Specifically, we have seen FG significantly ease the foreclosure measures as households and businesses have been allowed to resume economic activities. The multibillion naira in economic stimulus packages provided by monetary and fiscal authorities to help households and businesses cope with the effects of COVID-19 also supported the strong economic recovery observed during the review period.
In particular, rapid growth was propelled primarily by 6.74% growth in the non-oil sector; the trade, information and communication, manufacturing and agriculture sectors registering the highest growth rates of 22.49%, 5.55%, 3.49% and 1.30% respectively . In the oil and gas sector, however, we saw a 12.65% year-on-year decline in real production to 1.24 trillion naira (or $ 8.25 billion) as daily oil production average fell 12.29% year-on-year to 1.42 million barrels per day (mbpd). Note that the increase in the price of crude oil did not compensate for the reduction in the supply of crude oil.


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