Nigeria’s Gross Domestic Product (GDP) experienced a 2.51 percent year-on-year growth in real terms during the second quarter of 2023. This figure is below the 3.54 percent recorded in the second quarter of 2022, as stated in a report published by the National Bureau of Statistics (NBS) on Friday.
The NBS has linked the 2.51 percent growth to the difficult economic circumstances currently being faced in the country.
As indicated by the report, the total Gross Domestic Product (GDP) for the quarter under review amounted to N52.103 million in nominal terms. This figure shows an increase when compared to the second quarter of 2022, during which the aggregate GDP was N45 million, and the preceding quarter, which saw a total GDP of N51,242,151.21 million.
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The sectors that drove the growth
Highlights of the report show that the GDP’s performance during the analyzed period was primarily propelled by the Services sector, which achieved a growth of 4.42 percent. This sector also made a significant contribution of 58.42 percent to the overall aggregate GDP.
“The agriculture sector grew by 1.50 percent, an improvement from the growth of 1.20 percent recorded in the second quarter of 2022. The growth of the industry sector was -1.94 percent relative to -2.30 percent recorded in the second quarter of 2022.
“In terms of share to the GDP, agriculture, and the industry sectors contributed less to the aggregate GDP in the second quarter of 2023 compared to the second quarter of 2022.” It stated.
A more detailed examination of the report reveals that the industry sector experienced a growth rate of -1.94 percent, a slight improvement from the -2.30 percent registered in the second quarter of 2022. In terms of their contribution to the overall GDP, both the agriculture and industry sectors played a reduced role in the aggregate GDP during the second quarter of 2023 compared to the same period in 2022.
The report highlights that within the second quarter of 2023, the nation achieved an average daily oil production of 1.22 million barrels per day (mbpd), marking a decrease of 0.22 mbpd in contrast to the daily average of 1.43 mbpd achieved in the same quarter of 2022, as well as a decline of 0.29 mbpd from the production volume of 1.51 mbpd in the first quarter of 2023.
The actual growth rate of the oil sector was -13.43 percent (year-on-year) in Q2 2023. This represents a reduction of 1.66 percent points in comparison to the corresponding quarter of 2022 (-11.77 percent). Furthermore, there was a decline of 9.22 percent points when contrasted with Q1 2023, which recorded a growth rate of -4.2 percent.
On a quarter-on-quarter basis, the oil sector encountered a decline of -14.12 percent in Q2 2023. In terms of its contribution to the real GDP, the oil sector’s share was 5.34 percent in Q2 2023, a decrease from the figures reported during the corresponding period of 2022 and the preceding quarter, where it contributed 6.33 percent and 6.21 percent, respectively.
On the contrary, the non-oil sector experienced a real growth rate of 3.58 percent during the period. This figure is marginally lower by 1.19 percent in comparison to the rate recorded in the same quarter of 2022, and it is also 0.81 percent points higher than the first quarter of 2023.
The growth in the non-oil sector during the second quarter of 2023 was predominantly driven by Information and Communication (Telecommunication), Financial and Insurance (Financial Institutions), Trade, Agriculture (Crop production), Manufacturing (Food, Beverage & Tobacco), Construction, and Real Estate. These sectors collectively contributed to positive GDP growth.
In terms of the real GDP contribution, the non-oil sector accounted for 94.66 percent in the second quarter of 2023. This is a rise from the share reported in the same period of 2022, which was 93.67 percent, and an increase from the first quarter of 2023, which was documented as 93.79 percent.
Adeyemi Adeniran, the Statistician-General of the federation, attributed the positive economic performance of the non-oil sector to the growth achieved in certain economic activities. These included crop production in the Agriculture sector, trade, telecommunications, real estate within the Services sector, as well as crude petroleum in the Mining and Quarrying sector.
In his assessment, the notable contributing economic activities in real terms during the analyzed quarter are crop production at 20.66 percent, trade at 16.80 percent, telecommunications at 16.06 percent, crude petroleum at 5.34 percent, and real estate at 5.29 percent.
According to Adeniran, the economic activity in real terms for the second quarter of 2023 amounted to N17,719,335.38 million. This figure is slightly lower than the rates reported in the first quarter of 2023 (N17,750,060.97 million) but higher than the second quarter of 2022, which stood at N17,285,882.91 million.
“This highlighted the shortfall in production level in the quarter under review when compared with the previous quarters of Q1 2023 but higher than the corresponding quarter of Q2 2022.
“In nominal terms (current price), aggregate GDP stood at N52, 103,927.13 in Q2 2023, indicating a year-on-year nominal growth rate of 15.77 percent. This is higher than the value of N45, 004,520.89 million in Q2 2022 and N51, 242,151.21 million in the preceding quarter,” he said.