GDP expands by 3.84%, OPS projects stronger economy

Nigeria’s Gross Domestic Product grew by 3.84 per cent in real terms in the fourth quarter of 2024, reflecting an improvement from the 3.46 per cent recorded in the same period of 2023.

This also marked a slight increase from the previous quarter, which recorded an identical 3.46 per cent growth rate.

Economists and members of the Organised Private Sector described the Q4 2024 GDP growth of 3.84 per cent as a reflection of both the gradual recovery of the economy and the resilience of Nigerian entrepreneurs

The latest GDP data released by the National Bureau of Statistics attributes the expansion to stronger performance in the services sector, which recorded a 5.37 per cent growth rate and accounted for 57.38 per cent of the country’s total GDP.

The report read, “Nigeria’s Gross Domestic Product grew by 3.84 per cent (year-on-year) in real terms in the fourth quarter of 2024. This growth rate is higher than the 3.46 per cent recorded in the fourth quarter of 2023 and the third quarter of 2024 growth rate (approximately 3.46 per cent).

“The performance of the GDP in the fourth quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 5.37 per cent and contributed 57.38 per cent to the aggregate GDP.”

The PUNCH further learned that the figures released for the GDP are not based on the rebased methodology.

Despite the overall economic growth, the agriculture sector recorded a slower expansion of 1.76 per cent, down from 2.10 per cent in the corresponding quarter of 2023. The industry sector also experienced a downturn, growing by 2.00 per cent, lower than the 3.86 per cent posted in the previous year.

In nominal terms, aggregate GDP for the fourth quarter of 2024 stood at N78.37tn, marking an 18.91 per cent increase from N65.91tn recorded in the same quarter of 2023.

For the full year 2024, Nigeria’s economy grew by 3.40 per cent, an improvement from the 2.74 per cent recorded in 2023, driven mainly by the non-oil sector.

The oil sector’s contribution to GDP declined slightly, accounting for 4.60 per cent in the fourth quarter of 2024, compared to 4.70 per cent in the same period of 2023 and 5.57 per cent in the previous quarter.

Nigeria’s average daily crude oil production stood at 1.54 million barrels per day, a slight drop from 1.56mbpd recorded in the fourth quarter of 2023 but an improvement from 1.47mbpd in the third quarter of 2024.

The sector recorded a real GDP growth rate of 1.48 per cent, significantly lower than the 12.11 per cent recorded in Q4 2023 and the 5.17 per cent posted in Q3 2024.

However, on an annual basis, the oil sector reported a positive growth rate of 5.54 per cent, contrasting with the -2.22 per cent contraction recorded in 2023.

The non-oil sector, which continues to be the major driver of economic growth, expanded by 3.96 per cent in Q4 2024, outperforming the 3.07 per cent recorded in the same quarter of 2023 and the 3.37 per cent growth seen in the previous quarter.

The non-oil sector contributed 95.40 per cent to GDP, slightly above the 95.30 per cent reported in Q4 2023.

Key industries responsible for this growth include financial and insurance services, information and communication (notably telecommunications), agriculture (particularly crop production), trade, transportation and storage (especially road transport), and manufacturing.

The mining and quarrying sector, which includes crude petroleum, natural gas, and solid minerals, recorded a real GDP growth of 2.23 per cent, significantly lower than the 8.04 per cent recorded in Q4 2023.

Its contribution to GDP stood at 4.84 per cent, slightly down from 4.91 per cent in the same quarter of the previous year.

The agriculture sector, which remains critical for food security and employment, saw its real GDP growth slow to 1.76 per cent, compared to 2.10 per cent in Q4 2023. Crop production remained dominant, accounting for 90.70 per cent of the sector’s contribution to GDP.

The manufacturing sector recorded a real GDP growth rate of 1.79 per cent in Q4 2024, up from 1.38 per cent in the previous quarter. However, its share of GDP fell to 8.07 per cent, from 8.23 per cent in the corresponding quarter of 2023.

The construction sector grew by 2.95 per cent, slightly lower than the 3.70 per cent recorded in Q4 2023, contributing 3.44 per cent to GDP, compared to 3.47 per cent in the previous year.

The trade sector recorded a real GDP growth of 1.19 per cent, down from 1.40 per cent in Q4 2023 but an improvement from the 0.65 per cent posted in Q3 2024. Trade accounted for 15.11 per cent of total economic output in the quarter.

The financial and insurance sector was a standout performer, recording a real GDP growth rate of 27.78 per cent in Q4 2024, slightly lower than the 29.77 per cent seen in the preceding quarter. Its contribution to GDP increased to 6.10 per cent, from 4.95 per cent in Q4 2023.

The information and communication sector, largely driven by telecommunications, maintained its strong performance with a real GDP growth of 5.90 per cent, slightly below the 6.32 per cent recorded in Q4 2023. The sector accounted for 17.00 per cent of total GDP, up from 16.66 per cent in the previous year.

The transportation and storage sector saw a major turnaround, growing by 18.61 per cent in Q4 2024, in contrast to the -29.00 per cent contraction recorded in Q4 2023.

Its share of GDP stood at 1.26 per cent. Meanwhile, the electricity, gas, steam, and air conditioning supply sector contracted by -5.04 per cent in real terms, a sharp decline from the 6.17 per cent growth recorded in Q4 2023. The sector’s contribution to GDP remained at a modest 0.49 per cent.

Economists, OPS react

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the GDP report highlights the gradual recovery of the economy and the resilience of the Nigerian private sector.

“It also underscores the need to consolidate the stability gains in the macroeconomic environment and fix the productivity challenges constraining real sector performance,” he stated.

He noted that despite the daunting macroeconomic and structural headwinds, private investors continue to forge ahead.

“It is however worthy of note that the macroeconomic challenges started to ease in the second half of 2024. The exchange rate has been relatively stable since then. Inflationary pressures have decelerated marginally and energy prices have declined marginally as well.

“Overall, the outlook for investors’ confidence has been positive over the past few months,” he stated.

Meanwhile, the National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said it was not impressive that the contributions did not come from the real sector.

He said, “NBS noted the contribution came from the services sector, including the information and communication technology, Artificial Intelligence, and banking sectors, among others, not the real sector.

“Despite the contribution, it is not a good thing that it was not from the real sector which is the most important sector of the economy. It would have been better if the contribution was from the real/industrial sector.”

On the state of health of the economy, Kuti-George, said the indication of an improving economy was the interest rate, exchange rate, and the inflation, adding that these three rates were still up.

He added, “The inflation rate, exchange rate, interest rates are still up there, and those are indications of whether an economy is improving or not.”

Meanwhile, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said there were several reasons to agree with NBS on the GDP expansion.

He asserted, “This increase is for several reasons, the interventions of government particularly in the MSME sector, increased investment in the service sector, particularly in technology, a growing agricultural sector, rising domestic consumption, increased foreign direct investment, government infrastructure projects, and a gradual recovery in oil production.

“The birth of private refineries, revitalization of existing government refineries, CBN policies stabilising FX, improvement in non-oil export and earnings, sales of government treasury bills, etc, all work together to grow the GDP. We pray and hope this will be sustained and improved.”

On his part, the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa described the 3.84 per cent GDP growth rate in Q4 2024 as a “flat performance.”

According to Idahosa, Nigeria cannot afford to grow at the rate it currently does, especially given its population growth rate. He explained that it is until the GDP begins to move to rates around 4.5 per cent that there can be significant growth

He said, “You cannot afford in a country with, say, population growth rates of 2.7 to almost three per cent, depending on who is calculating. Everybody agrees that our growth rate is in that higher two per cent range; 2.8 to 2.9 per cent.

“So if you are growing at, let’s say, a three per cent growth rate of population, then you have to be growing at least twice that for a country like Nigeria with scale and emerging markets, a developing economy with a lot of aspects of the economy not matured.”