Nigeria GDP Growth Increases by 2.74% Following Reoccuring Hardship

The Nigerian economy has been reported to have slid below various projections to appear on a landscape highlighting negative growth despite different aggressive fiscal and monetary intervention reforms by the present and past administrations at the central and sub-national levels.

Yesterday, the National Bureau of Statistics (NBS) released data showing that Nigeria's economy, dependent on the gross domestic product (GDP), grew negatively in 2023 against various projections. It was titled, "On an annual basis, GDP grew by 2.74% in 2023 relative to 3.10% in 2022."

It was reported that the country's full-year GDP growth was even lower compared to the World Bank and International Monetary Fund (IMF) projections.

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According to the IMF and World Bank projections, Nigeria's economic growth rate is expected to decline from 3.3% in 2022 to 2.9% in 2023. The FG projected that the economy will grow to 3.5% in 2023 following some macroeconomic stabilisation reforms that the previous administration drove.

However, the economy grew by 3.46% (year-on-year) in real terms in the fourth quarter of 2023.

The Nigerian economy increased by 3.46% in Q4 2023. The growth rate is, however, lower than the 3.52% recorded in the fourth quarter of 2022 and higher than the third quarter of 2023 growth of 2.54%.

The NBS stated that the performance of the GDP in Q4 2023 was driven mainly by the services sector, which recorded a growth of 3.98% and contributed 56.55% to the aggregate GDP. The agriculture sector also grew by 2.10%, up from the growth of 2.05% recorded in the fourth quarter of 2022.

The industry sector's growth was 3.86%, an improvement from -0.94% recorded in the fourth quarter of 2022 and in terms of share of the GDP, industry and the services sectors contributed more to the aggregate GDP in the fourth quarter of 2023 compared to the fourth quarter of 2022. On an annual basis, GDP grew by 2.74% in 2023, relative to 3.10% in 2022.

In the quarter under review, aggregate GDP stood at N65,908,258.59 million in nominal terms, according to the NBS figure. The performance is higher than the fourth quarter of 2022, which recorded an aggregate GDP of N56,757,889.95 million, indicating a year-on-year nominal growth of 16.12%.

The Nigerian economy has been broadly classified into the oil and non-oil sectors.

According to the NBS figure released yesterday, the natural growth of the oil sector was 12.11% (year-on-year) in Q4 2023, indicating an increase of 25.50% relative to the rate recorded in the corresponding quarter of 2022 (-13.38%). Growth also increased by 12.96% points compared to Q3 2023, which was -0.85%. The oil sector contributed 4.70% to the total real GDP in Q4 2023, up from the figure recorded in the corresponding period of 2022 and down from the preceding quarter, where it contributed 4.34% and 5.48%, respectively.

Conversely, the non-oil sector contributed 95.30% to the nation's GDP in the fourth quarter of 2023, lower than the share recorded in the fourth quarter of 2022, which was 95.66% and higher than the third quarter of 2023, recorded as 94.52%.

The mining and quarrying sector, which plays a significant role in the nation's economic output, grew by 8.04% (year-on-year) in the fourth quarter of 2023. Compared to the same quarter of 2022 and the third quarter of 2023, it was higher by 19.43% points and increased by 10.01% points, respectively. Quarter-on-quarter, the growth rate recorded was -2.38%.

The sector's Annual growth in 2023 was -2.84%, higher than -18.16% in 2022. The contribution of mining and quarrying to real GDP in the quarter under review stood at 4.91%, higher than the rate of 4.71% recorded in the corresponding quarter of 2022 and lower than the 5.64% recorded in Q3 2023.