Amid mounting economic challenges Nigeria is struggling with, the National Bureau of Statistics (NBS) on Monday announced that the third quarter 2024 gross domestic product (GDP) was 3.46 per cent on a year-on-year basis.
It said the growth is 0.92 percentage points higher than the rate recorded in Q3 2023 which was 2.54 per cent.
Both the World Bank and the International Monetary Fund (IMF), had projected a GDP growth rate of 3.3 per cent and 2.9 per cent for Nigeria in 2024 respectively.
This 3rd quarter growth rate is in sharp contrast with what is on ground which shows that the harsh economic situation arising from high inflation and fluctuation of the naira, are making the environment unfriendly for businesses.
The country is currently battling high inflation at 33.88 per cent, food inflation of 39.16 per cent and an exchange rate of over N1,600/$.
These conditions has made the business environment very unfriendly with some businesses shutting down.
Recent Statistics show that in the first six months of 2024, at least five major companies, including, Microsoft Nigeria, Total Energies Nigeria, PZ Cussons Nigeria PLC, Kimberly-Clark Nigeria and Diageo PLC, exited the country as the business climate remained difficult.
This is in addition to over 10 major companies that pulled out from Nigeria in 2023 including, Unilever Nigeria PLC, Procter & Gamble Nigeria, GlaxoSmithKline Consumer Nigeria Ltd, ShopRite Nigeria, Sanofi-Aventis Nigeria Ltd, Equinox Nigeria, Bolt Food & Jumia Food Nigeria, citing profitability concerns and challenging business conditions.
The government has embarked on some economic reform measures which it believes will rejuvenate the economy. The government is also looking to reduce tax burden on businesses with its new tax reform bill now with the National Assembly.
The NBS noted that the 3rd quarter GDP was higher by 0.27 percentage points relative to the 3.19 per cent recorded in the second quarter (Q2) of 2024.
The report said economic activity in real terms for Q3 2024 stood at N20.1 trillion which is higher than the rates recorded in the preceding Q2 2024 which stood at N18.2 trillion, and the corresponding quarter Q3 2023 which recorded N19.4 trillion.
The report further stated that in nominal terms (current price), aggregate GDP stood at N71.1 trillion in Q3 2024, indicating a year-on-year nominal growth rate of 17.26 per cent compared to the value of N60 trillion recorded in Q3 2023.
Similarly, it said, the quarter under review is higher than the value of N60.9 trillion recorded in the preceding quarter (Q2 2024).
It noted that the major contributing economic activities in real terms in the quarter under review are crop production 26.51 per cent, trade 14.78 per cent, telecommunication 13.94 per cent, crude petroleum 5.57 per cent and real estate 5.43 per cent.
On a broad classification of the economic activities into agriculture, industry, and services sectors based on growth, the agricultural sector grew by 1.14 per cent in Q3 2024 in real terms, which is less than Q3 2023 which recorded 1.30 per cent.
The industry grew by 2.18 per cent in Q3 2024, which shows improvement compared to the figure recorded in Q3 2023 which was 0.46 per cent, while the services sector grew by 5.19 per cent higher than the 3.99 per cent recorded in Q3 2023.
Analyses of the contributions of the broad economic sectors in the period under review shows that agriculture contributed 28.65 per cent, industry 17.77 per cent, and services 53.58 per cent.
Agriculture and industry contributions were less than their contributions in Q3 2023 by 0.66 per cent and 0.22 per cent respectively, while the Services sector had the highest contribution to the GDP in Q3 2024, surpassing the Service sector’s contribution in the corresponding quarter of 2023 by 0.88 per cent.
Further disaggregation of the economic activities into oil and non-oil sectors, shows that the oil GDP grew by 5.17 per cent in Q3 2024, which shows improvement compared to Q3 2023 (-0.85 per cent) but less than the previous quarter of Q2 2024 which recorded 10.15 per cent.
Similarly, the oil sector accounted for 5.57 per cent of the total GDP during the quarter under review.
According to the report, “The third quarter of 2024 recorded an average daily oil production of 1.47 million barrels per day (mbpd), higher than the daily average production of 1.45 mbpd recorded in the same quarter of 2023 by 0.02 mbpd and higher than the second quarter of 2024 production volume of 1.41 mbpd by 0.07 mbpd.”
In real terms, the non-oil sector contributed 94.43 per cent to the GDP in Q3 of 2024. This shows a decrease on a year-on-year basis compared to the same period in 2023, which stood at 94.52 per cent but higher than Q2 2024, which recorded 94.30 per cent.