Despite facing a challenging inflation rate of 26.72% in October, Nigeria’s economy demonstrated resilience, growing 2.54% in the third quarter of this year. This growth outpaces the 2.51% increase in Q2 and the 2.25% in the same period last year, showcasing the nation’s economic strength.
The National Bureau of Statistics (NBS) released its Q3 2023 GDP report, revealing that the services sector, with a growth of 3.99%, primarily drove this economic surge, contributing 52.70% to the total GDP.
Meanwhile, the agriculture sector grew marginally at 1.30%, a slight decrease from 1.34% in Q3 2022. The industry sector marked a significant improvement, registering a 0.46% growth, reversing the -8.00% downturn in Q3 2022.
The NBS report observed that, in terms of GDP share, agriculture and industry contributed less in Q3 than in the same quarter last year.
Ongoing insecurity challenges, causing many farmers to abandon their farms, largely explain the agriculture and industry sectors’ underperformance. The high inflation rate also affected manufacturing firms, prompting some to halt or reduce operations due to rising production costs.
The NBS report further highlighted that Nigeria’s nominal GDP for Q3 2023 stood at N60.66 trillion, while real GDP reached N19.44 trillion. Notably, real GDP factors in inflation, unlike nominal GDP.
“In the reviewed quarter, aggregate GDP hit N60.66 trillion in nominal terms. This figure represents a significant increase from Q3 2022’s N52,255,809.62, marking a year-on-year nominal growth of 16.08%,” the NBS reported.
The report also detailed that the non-oil sector, encompassing Information and Communication (Telecommunication), Financial and Insurance (Financial Institutions), Agriculture (Crop Production), Trade, Construction, and Real Estate, grew by 2.75% in real terms during Q3 2023.
Although this growth was slightly lower than the rates in the same quarter of 2022 and Q2 of 2023, the non-oil sector impressively contributed 94.52% to the nation’s GDP in Q3 2023, a bit higher than Q3 2022’s 94.34% but lower than Q2 2023’s 94.66%.
In contrast, the oil sector, traditionally a major GDP contributor, accounted for only 5.48% of the total real GDP in Q3 2023, down from the same period in 2022 but up from the previous quarter.
According to a report by The Guardian, the oil sector’s real growth rate in Q3 2023 was -0.85% year-on-year, a considerable improvement from the -22.67% recorded in the same quarter of 2022. The sector also experienced a 12.58% increase compared to Q2 2023.
“Quarter-on-quarter, the oil sector grew 12.47% in Q3 2023,” the report added.
The third quarter also witnessed an increase in daily oil production to 1.45 million barrels per day (mbpd), higher than the Q3 2022 average of 1.20 mbpd and the Q2 2023 production volume of 1.22 mbpd.
This growth trend in Nigeria’s economy, spearheaded by the non-oil sector, signals a diversifying economy and a shift towards more sustainable growth avenues.
