The Central Bank of Nigeria, CBN, has hinted that the non-oil sector was the primary driver of the Nigerian economy’s 3.46 per cent growth in Q32024, which saw output reach ₦20.115 trillion, up from 3.19 per cent (₦18.285 trillion) in Q2 2024.
This was disclosed in the recently published Economic Report for the third quarter of 2024 by the CBN.
According to the study, the tight monetary policy stance and the decline in the food component of the Consumer Price Index basket caused inflation to reduce during the quarter.
Increased security around oil pipeline infrastructure in the Niger Delta region led to an increase in domestic crude oil production.
According to the CBN, the economy grew in the third quarter of 2024 despite ongoing challenges.
The 3.46 per cent rise in Q32024 marked the third straight year-to-date expansion, higher than the 3.19 per cent and 2.54 per cent growth in Q22024 and the comparable quarter of 2023, respectively.
Growth was a result of ongoing initiatives to enhance the business climate, simplify laborious procedures, and raise the calibre of the infrastructure.
The research highlighted that the strong expansion in the services industry, especially the finance and insurance sub-sector, was encouraged by the 24-month window time that was opened for the banking sector to be re-capitalized (based on their license category and permission).
The oil industry maintained positive growth for the fourth consecutive quarter because of the government’s persistent efforts to increase crude oil production to a target of 2 million barrels per day by the end of 2024.
The oil industry gained 5.17 per cent (year-over-year) in Q32024, compared to 10.15 per cent in the previous quarter, and it contributed 0.28 percentage points to the period’s overall growth.
The decline in the worldwide price of Nigeria’s Bonny Light oil, which was US$86.92/b in Q22024, to US$82.07/b caused the performance to be slower than it was in the previous quarter.
But as crude oil output rose from 1.27 million barrels per day in Q22024 to 1.33 million barrels per day in Q32024, the industry continued to contribute favourably to overall growth.
Growth in the non-oil sector contributed 3.18 percentage points to overall growth in Q32024, increasing to 3.37 per cent from 2.80 per cent in the previous quarter. The success of the transportation & storage, real estate, trade, crop production, finance & insurance, and technology & communication sub-sectors propelled the growth of the non-oil sector.
Regarding sectoral performance, the CBN reported that all three sectors—agriculture, industry, and services—saw growth in Q32024.
The services sector remained the most dominant sector, accounting for 53.58 per cent of the total gross domestic product, and grew at the quickest rate, 5.19 per cent in Q32024 compared to 3.79 per cent in Q22024 and 3.99 per cent in Q32023.
The subsector of financial and insurance services rose by 30.83 per cent within the services sector, as opposed to 28.79 and 28.21 per cent in the previous and comparable quarters of 2023. According to the report, this performance was boosted by the profits from the recapitalisation exercise that the CBN announced.
The rise of the sub-sector was also influenced by other aspects, including consulting fees, ATM and transfer fees, and revenues from interest gains (after ongoing interest rate hikes).
Additionally, while the financial sector continues to undergo digital transformation—which includes the notable expansion of fintech firms, mobile banking, and digital payment systems—the information and communications subsector expanded by 5.92 per cent, which contributed 0.95 percentage points to GDP growth.
The continued demand for digital services such as e-commerce and data/internet services, which contributed to the growth of economic activity in the other sub-sectors, including trade and real estate, by 0.65 and 0.68 per cent, respectively, further improved the performance of the ICT sub-sector.
Compared to the previous and corresponding quarters of 2023, when it contracted by 13.53 and 35.85 per cent, respectively, the transport and storage sub-sector expanded by 12.15 per cent.
The increase in road travel due to better security circumstances and the replacement of air transport (because of higher air charges) were the main drivers of the expansion. Additional factors contributing to the sub-sector’s growth were ongoing expenditures in road infrastructure and alternative energy sources (CNG) for transportation.
The agriculture industry experienced a low 1.14 per cent growth, as opposed to 1.41 and 1.30 per cent growth in the previous and corresponding quarters of 2023.
Increased harvests of several staples and excellent climatic conditions were the main drivers of the development.
Crop output increased by 1.18 per cent, up from 1.65 per cent in Q22024, while the livestock and forestry sub-sectors expanded by 1.03 and 2.23 per cent, respectively, up from 1.71 per cent and 2.77 per cent in Q22024.
However, the fishing subsector shrank by 1.91 per cent, compared to 0.38 per cent growth in the previous quarter.
In comparison to Q22024 and Q32023, when it grew by 3.53 and 0.46 per cent, respectively, the industrial sector continued on its upward track, expanding by 2.18 per cent in Q32024.
In Q32024, the Industrial Production Index (IPI) expanded by 2.04% (year-over-year) compared to 4.13 per cent in the previous quarter, reflecting this slower growth.
The sector’s growth outcome during the period under review was aided by the government’s persistent attempts to increase crude oil output, which increased from 1.27 Mbps in Q22024 to 1.33 Mbps in Q32024.
Because of the enhanced security in the oil-producing region, production increased.
The sub-sectors of mining and quarrying showed modest performance, growing 3.27 per cent as opposed to 7.79 per cent and 1.96 per cent in the previous and corresponding quarters of 2023, among other comparisons.
With oil excluded, the industry sector increased by 0.87 per cent as opposed to 0.85 and 1.04 per cent in the previous and comparable quarters of 2023.
Water supply (9.78%) and sewerage waste management (3.23%) saw steady increases in growth, whereas manufacturing (0.92%), building (2.91%), and electricity saw more moderate increases.
As opposed to the 45.89 and 29.01 per cent declines in the previous and corresponding quarters of 2023, respectively, a significant contraction of 61.36 per cent was noted in the mining and quarrying subsector.
