Nigeria’s economic landscape exhibited a notable upswing in the fourth quarter of 2024, with the Gross Domestic Product (GDP) expanding by 3.84% year-on-year in real terms, according to the latest data released by the National Bureau of Statistics (NBS). This represents a clear acceleration from the 3.46% growth recorded in both the preceding quarter and the same period in 2023, signaling a positive momentum in the nation’s economic trajectory.
“Nigeria’s Gross Domestic Product (GDP) grew by 3.84% (year-on-year) in real terms in the fourth quarter of 2024. This growth rate is higher than the 3.46% recorded in the fourth quarter of 2023 and the third quarter of 2024 growth rate (approximately 3.46%),” the NBS report stated.
The primary catalyst for this growth was the robust performance of the Services sector, which surged by 5.37% and contributed a substantial 57.38% to the nation’s overall GDP. This sector’s expansion underscores the increasing significance of service-oriented industries in driving Nigeria’s economic progress.
However, the economic narrative is not without its complexities. While the Services sector thrived, the agriculture sector experienced a deceleration, growing by a modest 1.76%, down from 2.10% in Q4 2023. Similarly, the industry sector underperformed, registering a 2.00% growth, a decline from the 3.86% posted in the same period of the previous year.
For the entirety of 2024, Nigeria’s GDP grew by 3.40%, a notable improvement from the 2.74% recorded in 2023. In nominal terms, the aggregate GDP for Q4 2024 reached N78.37 trillion, reflecting an 18.91% increase from the N65.91 trillion recorded in Q4 2023.
Oil Sector’s Mixed Fortunes
Despite a slight increase in average daily oil production to 1.54 million barrels per day (mbpd) in Q4 2024, the oil sector’s real GDP growth plummeted to 1.48%, a stark contrast to the 12.11% growth in Q4 2023. This discrepancy highlights the persistent challenges facing Nigeria’s oil industry, even amidst increased output. The sector’s contribution to GDP also dipped to 4.60%. However, for the full year 2024, the sector showed a recovery with 5.54% growth, after a contraction in 2023.
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Non-Oil Sector: The Economic Backbone
The non-oil sector continued to be the bedrock of Nigeria’s economy, expanding by 3.96% in Q4 2024 and accounting for 95.40% of the total GDP. This growth was propelled by strong performances in key sectors, including Financial and Insurance Services, Information and Communication (Telecoms), Agriculture (Crop Production), Trade, and Manufacturing.
The Financial and Insurance Services sector stood out with a remarkable 27.78% growth, contributing 6.10% to the GDP. The telecoms industry also maintained its momentum, expanding by 5.90% and contributing 17.00% to the GDP.
Implications and Observations
These figures not just as data points, but as indicators of the lived experiences of millions of Nigerians. The surge in the Services sector, particularly in financial services and telecoms, suggests an expanding digital economy, potentially creating new opportunities for young entrepreneurs and tech-savvy individuals. However, the slower growth in agriculture raises concerns about food security and the livelihoods of rural communities.
The decline in the oil sector’s contribution, despite increased production, paints a picture of volatility. This instability impacts revenue streams and can affect public spending on crucial infrastructure and social programs. The growth in the non-oil sector is a positive sign, indicating diversification, but sustained efforts are needed to ensure inclusive growth that benefits all segments of society.
The rebound in the transportation sector, with 18.61% growth, reflects increased economic activity and mobility, which can enhance trade and connectivity. However, the continued contraction in the electricity sector, at -5.04%, underscores the persistent power challenges that hinder economic progress and daily life.
In essence, while Nigeria’s economic growth is a positive development, it is crucial to address the disparities and challenges across different sectors to ensure sustainable and inclusive prosperity. As the NBS prepares to unveil a rebased GDP in Q1 2025, it will be interesting to see how these figures are adjusted and what new insights they provide.
