There are hopes of business boom as Nigeria’s Gross Domestic Product (GDP) grew by 0.11% (year-on-year) in the last quarter of 2020, signifying the first quarterly growth over the last three quarters of the same year.
In 2021, we expect the global economy to take 'a shot at recovery', largely due to the announcement and approval of effective Covid-19 vaccines. The risks of re-emerging infections remain high, however, and much will depend on the speed, scale, and long-term effectiveness of vaccination.
At the close of 2020, the largest sub-sectors in the economy were Crop Production at 3.68%, Crude Petroleum and Natural Gas at 8.2%, Trade at 14.9%, Telecommunications & Information Services at 12.2%, and Real Estate at 5.7%.
All 5 sub-sectors recorded significant improvement in their Real GDP Growth numbers including those that are still in contraction.
- For example, Crop Production’s GDP grew in the 4th quarter by 3.42% compared to 1.39% in the previous quarter, nearly double quarter on quarter. Crop Production constitutes a significant portion of Nigeria’s GDP and most of all.
- Trade GDP, which constitutes 15.5% of the total GDP, contracted by 3.2% compared to a 12.12% contraction in the prior quarter. This is an example of a sector that improved hugely despite still being in a contraction.
- The Telecommunication sector grew by 17.64% in the 4th quarter of the year compared to 17.36% in the prior quarter. At 12.2%, the Telecommunication sector is now one of the largest in the economy. We believe this sector is a major reason why Nigeria got out of the recession.
- Finally, the Real Estate sector, which had been in contraction since the second quarter of 2019, finally snapped out of recession in the 4th quarter, when it grew by 2.81%.
- Thus, Trade, Telecommunications, Real Estate, and Crop Production GDP performances are the reasons why we are out of recession.
The result of the latest round of GDP figures does not in any way suggest the Nigerian economy is out of the woods. The economy is in a critical condition and most sectors are still in contraction, even those growing could easily fall back into a recession. However, we do know which sectors will drive economic growth in the country.
The positive growth was largely driven by growth recorded in the Information and Communication sector (15.9%) and Agriculture (3.42%) particularly in crop production. Other drivers were Real Estate, Manufacturing, Mining and Quarrying and Construction.
- The agricultural sector, in the fourth quarter of 2020, grew by 3.42% (year-on-year) in real terms, an increase by 1.11% points from the corresponding period of 2019, and an increase of 2.03% points from the preceding quarter which recorded a growth rate of 1.39%.
- The sector also contributed 26.95% to the overall GDP in real terms in Q4 2020, higher than the contribution in Q4 2019 but lower than Q3 2020 which stood at 26.09% and 30.77% respectively.
- Real GDP growth in the manufacturing sector in the quarter under review stood at –1.51% (year on year), lower than the corresponding period of 2019 and the preceding quarter by 2.75% points and 0.01% points respectively.
- The real contribution to GDP in Q4 2020 was 8.60%, lower than the 8.74% recorded in the fourth quarter of 2019 and 8.93% recorded in Q3 2020.
- In real terms, the Trade sector contracted by 3.2% (year-on-year) in the fourth quarter of 2020, which was 2.62% points lower than the rate recorded in Q4 2019, and 8.92% points higher than in the preceding quarter.
- Trade’s contribution to GDP was 15.46%, which is lower than the 15.99% it represented in the corresponding period of 2019, but higher than the 13.88% recorded in the previous quarter.
- Information and communication recorded a growth rate of 14.95% in real terms, an increase of 6.45% points over the corresponding period of 2019.
- The sector contributed 15.06% to aggregate real GDP in Q4 2020, higher than the same quarter of the previous year in which it represented 13.12% and higher than the preceding quarter, in which it represented 13.47%.
Real Estate, being a major job-creating sector, is also pivotal to putting money in the pockets of unskilled workers who feed off the indirect jobs it creates. For the sector to thrive, the government will need to solve the high-interest rate regime which has been the bane of progress for this sector for decades.
Top growth areas for business owners in 2021:
1. Sales & Marketing
If you want to see effective results, your sales and marketing teams should not be working in silos.
When you align these two areas, you enable our business to increase conversion rates, generate higher revenue, and retain more customers through streamlined sales and marketing funnel.
A collaborative sales and marketing team will not only convert more leads but also generate higher quality leads too. When a strong sales team informs the marketing team on what a ‘good quality lead’ looks like, they are far more likely to find them.
2. Customer Experience
People are constantly changing, and so are their needs. In order to retain your customers, you have to constantly put them first. You can do this by understanding what it is they enjoy about your brand, and what they don’t.
Focusing on creating a memorable and positive customer experience goes beyond just making the sale. Having a follow-up journey and personalized added extras will show your customers that you value their business and will go the extra mile to keep them coming back.
3. Digital Transformation
The world was catapulted into a full-scale digital revolution in 2020, with individuals and businesses alike having to rapidly adapt to an online world.
Industry statatics showed that online retail sales grew by around 50% during the initial lockdown. This mirrored the types of loan applications by SMEs, with an increase of 20% percent in loan applications coming from online retailers.
According to a researcher, “These were mostly used to capacitate these businesses as well as expand their eCommerce offering.”
The power of technology has allowed any type of business to seamlessly fit into our lives.
Going digital has also made it easier for businesses to simplify and streamline their internal processes for a more efficient way of working. For example, using online tools to store your data like accounting or human resource documents can free up your time and physical space to do more.
4. Data-driven Transformation
The biggest factor that should inform any decisions you make within your business should be based on customer feedback.
Using data from sources such as your cancellation feedback, customer reviews, and even your customers’ behavioural patterns on your website to inform what changes you need to make to your products and services, will add greater value to the growth of your business than a decision made by one person.
5. Education & Training
The landscape of learning has changed dramatically post-pandemic and with the added learning curve of remote learning and hybrid models. Educators who are ready to take on these new challenges are in high demand.
Parents attempting to balance work-from-home life sought tutors and assistants with teaching backgrounds to help alleviate the pressure of dual-parent/ educator roles by 20% according to data received in 2020.
Ongoing training is essential to the growth of any business and should always be a focus area year after year.
By investing in your people, you are directly investing in your business as well.
Other areas to focus include:
Due to an increased demand to streamline remote operations for companies across the globe, data scientists are in great demand. This career path compensates experts handsomely for their trade.
If you have a background in programming, statistics, machine learning, calculus, and coding you have the tools required to excel in this industry and establish your business.
The search for software developers increased by 25% post-pandemic according to recent findings. Software developers with excellent time management skills, mathematical aptitude, attention to detail, and a demonstrated understanding of different programming languages, data structures, and algorithms were offered job openings as against those in other fields.
This shows an area of opportunity for many businesses.
It should come as no surprise that jobs in the healthcare sector have risen dramatically in light of a global health crisis. Advancement in practicing medicine or improving telehealth operations to provide care or training at home have a great chance in growing in the hospital or private practice.
AI are more in demand than ever. This could be because companies were forced to rethink their strategies when the pandemic hit so they looked for ways to keep up with production despite having less “human” hands-on board. The Fintech sector grew by 27.7% in 2020 with many having investors through in millions of dollars.
Mental health practitioners
Adjusting to the new normal imposed by this pandemic hasn’t been easy for anyone. The most resilient human being can only take so much isolation and abrupt changes to their day to day lives before they break and reach out to specialists to talk them through unprecedented times.
No matter which way the global market is turning, businesses require financial insights to stay afloat.
Several companies had to bring financial analysts onboard in 2020 to rework budgets to stay in business, when operations stagnated during the height of the coronavirus crisis.
Financial literacy, experience in accounting, and organizational skills will set you apart from the competition if you’re trying to break into this field.
Learn more on financial management here
This insight gives your business the revelant information for growth in 2021.