Nigeria’s economy experienced a year-on-year GDP growth of 2.98% in the first quarter of 2024, according to the latest report from the Nigerian Bureau of Statistics (NBS).
This growth, while higher than the 2.31% recorded in the first quarter of 2023, marks a decline from the 3.46% growth seen in the fourth quarter of 2023.
“The performance of the GDP in the first quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 4.32% and contributed 58.04% to the aggregate GDP,” the NBS report highlighted.
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In the first quarter of 2024, the agriculture sector showed signs of recovery, growing by 0.18%. This marks a notable improvement from the -0.90% contraction recorded in the same period last year. The industry sector also demonstrated growth, expanding by 2.19% in Q1 2024 compared to the 0.31% growth in Q1 2023.
These figures suggest a broad-based recovery across different sectors of the economy, highlighting the diversified nature of Nigeria’s economic growth.
Aggregate GDP in nominal terms stood at N58,855,142.27 million for Q1 2024, reflecting a year-on-year nominal growth of 14.86% from N51,242,151.21 million in Q1 2023.
“This increase in nominal GDP indicates not only economic growth but also inflationary pressures, as the value of goods and services produced in the economy has risen significantly,” the NBS said.
For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors. In the first quarter of 2024, Nigeria recorded an average daily oil production of 1.57 million barrels per day (mbpd), higher than the daily average production of 1.51 mbpd recorded in the same quarter of 2023 by 0.06 mbpd and slightly higher than the fourth quarter of 2023 production volume of 1.55 mbpd by 0.02 mbpd.
The real growth of the oil sector was 5.70% (year-on-year) in Q1 2024, indicating an increase of 9.91 percentage points relative to the rate recorded in the corresponding quarter of 2023 (-4.21%). However, growth decreased by 6.41 percentage points when compared to Q4 2023, which saw a growth rate of 12.11%. On a quarter-on-quarter basis, the oil sector recorded a growth rate of 13.77% in Q1 2024.
“The Oil sector contributed 6.38% to the total real GDP in Q1 2024, up from the figure recorded in the corresponding period of 2023 and up from the preceding quarter, where it contributed 6.21% and 4.70% respectively,” the NBS noted.
This growth in the oil sector is crucial for Nigeria, given its significant contribution to foreign exchange earnings and government revenues.
The non-oil sector, which encompasses a wide range of economic activities outside the petroleum industry, grew by 2.80% in real terms during the reference quarter.
This growth rate was higher by 0.02 percentage points compared to the rate recorded in the same quarter of 2023 and 0.28 percentage points lower than the fourth quarter of 2023.
“This sector was driven in the first quarter of 2024 mainly by Financial and Insurance (Financial Institutions); Information and Communication (Telecommunications); Agriculture (Crop production); Trade; and Manufacturing (Food, Beverage, and Tobacco), accounting for positive GDP growth,” the report said.
In real terms, the non-oil sector contributed 93.62% to the nation’s GDP in the first quarter of 2024, lower than the share recorded in the first quarter of 2023, which was 93.79%, and lower than the fourth quarter of 2023, recorded at 95.30%.
Despite this positive trajectory, the country faces significant challenges due to persistently high inflation rates, which threaten to overshadow these economic gains. While these figures paint a picture of a growing economy, they are tempered by the reality of high inflation that continues to impact the purchasing power of Nigerians.
Economists note that the positive GDP growth, although encouraging, must be viewed within the context of an economy where inflationary pressures persist, eroding real income gains and increasing the cost of living for the average Nigerian. This economic challenge poses a significant threat to the sustainability of the growth trajectory observed in the first quarter of 2024.
Against this backdrop, economic experts and business leaders said that while Nigeria’s GDP growth in the first quarter of 2024 is a positive development, it is crucial to address the inflationary pressures that threaten to undermine these gains.
They urge Policymakers to focus on stabilizing the economy, curbing inflation, and ensuring that economic growth translates into tangible benefits for the population. Earlier, financial analysts had noted that the path to sustainable economic prosperity lies in balanced growth, where sectoral performances are not only robust but also inclusive, addressing the pressing issues of inflation and improving the overall quality of life for Nigerians.