The economy grew by 3.46 per cent in Q32024, with output reaching ₦20.115 trillion, up from 3.19 per cent (₦18.285 trillion) in Q2 2024, driven mainly by the non-oil sector.
This was revealed in the Central Bank of Nigeria’s newly released Economic Report for the third quarter of 2024.
The report said inflation moderated during the quarter, reflecting the fall in the food component of the Consumer Price Index basket, and driven by the restrictive monetary policy stance.
Domestic crude oil production increased, following enhanced security measures around oil pipeline infrastructure in the Niger Delta region.
Despite persisting headwinds, CBN said the economy continued to expand in the third quarter of 2024.
The growth of 3.46 per cent recorded in Q32024, represented the third consecutive expansion year-to-date surpassing the 3.19 per cent and 2.54 per cent recorded in Q22024 and corresponding quarter of 2023, respectively.
Growth was on account of continued efforts to improve the business environment, streamline cumbersome business processes and deepen the quality of business infrastructure.
The 24-month window period opened for the banking sector re-capitalisation (according to their license category and authorisation) supported the robust growth in the services sector, particularly, the finance and insurance sub-sector, the report explained.
The continued drive of the government to improve crude oil production to a target of 2 million barrels per day by year-end of 2024, helped the oil sector to maintain positive growth for the fourth consecutive quarter.
Thus, the oil sector grew by 5.17 per cent (year-on-year) in Q32024, compared with a growth of 10.15 per cent in the preceding quarter, and contributed 0.28 percentage points to the overall increase in the period under review.
The performance was slower than the preceding quarter, owing to a drop in prices of Nigeria’s Bonny Light crude in the international market, to US$82.07/b from US$86.92/b in Q22024.
However, with the increase in crude oil production from 1.27mbpd in Q22024 to 1.33mbpd in Q32024, the sector maintained a positive contribution to overall growth.
The non-oil sector growth accelerated to 3.37 per cent in Q32024 compared with a growth rate of 2.80 per cent in the preceding quarter, contributing 3.18 percentage points to total growth. The expansion of the non-oil sector was driven by the performance of the financial & insurance, information & communication, crop production, trade, transportation & storage, and real estate sub-sectors.
In terms of sectoral performance, CBN said all the sectors, (agriculture, industry and services) grew in Q32024.
The Services sector expanded at the fastest pace by 5.19 per cent in Q32024, compared with 3.79 per cent in Q22024 and 3.99 per cent in Q32023, remaining the most dominant sector, and accounting for 53.58 per cent of aggregate Gross Domestic Product.
Within the services sector, financial & insurance sub-sector grew by 30.83 per cent, compared with 28.79 and 28.21 per cent in the preceding and corresponding quarters of 2023, respectively. This performance was spurred by gains from the recapitalisation exercise that was announced by the CBN, according to the report.
Other factors such as profits from interest gains (following continued hikes in interest rates), consultancy fees, and ATM & transfer fees contributed to the growth of the sub-sector.
Also, given the financial sector’s ongoing digital transformation (including the significant growth of fintech companies, mobile banking, and digital payment systems), the information and communications subsector grew by 5.92 per cent (contributing 0.95pp to GDP growth).
The performance of the ICT sub-sector was further boosted by the ongoing demand for digital services like e-commerce and data/internet services, which helped to grow economic activity in the other sub-sectors like trade and real estate 0.65 and 0.68 per cent, respectively.
The transport and storage sub-sector grew by 12.15 per cent, compared with contractions of 13.53 and 35.85 per cent in the preceding and corresponding quarters of 2023, respectively.
The growth was driven by the increase in road transport owing to improved security conditions and substitution from air transport (due to higher air fares). Also, sustained investments in road infrastructure, as well as investments in alternative sources of energy (CNG) for road transport contributed to the uptick in the sub-sector.
The agriculture sector grew modestly by 1.14 per cent, compared with 1.41 and 1.30 per cent in the preceding and corresponding quarters of 2023, respectively.
The growth was driven by the favourable weather conditions and increased harvests of some staples.
Crop production grew by 1.18 per cent, compared with1.65 per cent in Q22024, while the forestry and livestock sub-sectors grew by 2.23 and 1.03 per cent, respectively, compared with a growth of 2.77 per cent and a contraction of 1.71 per cent in Q22024.
The fishing sub-sector, however, contracted by 1.91 per cent, against a growth of 0.38 per cent in the preceding quarter.
The industry sector maintained a positive trajectory, growing by 2.18 per cent in Q32024, compared with 3.53 and 0.46 per cent in Q22024 and Q32023, respectively.
This slower growth was reflected in the Industrial Production Index (IPI), which grew by 2.04 per cent (year-on-year) in Q32024, compared with 4.13 per cent in the preceding quarter.
Sustained efforts by the government, however, to improve crude oil production (to 1.33mbpd in Q32024 from 1.27 mbpd in Q22024), contributed to the sector’s growth outcome in the period under review.
The increased production was on account of improved security in the oil-producing region.
Modest performances were recorded in the mining & quarrying sub-sectors with a growth of 3.27 per cent compared with 7.79 per cent and a contraction of 1.96 per cent in the preceding and corresponding quarters of 2023, respectively.
The industry sector, less oil, grew by 0.87 per cent compared with 0.85 and 1.04 per cent in the preceding and corresponding quarters of 2023, respectively.
Growth reflected the sustained gains in water supply (9.78%), sewerage waste management (3.23%); milder expansions in electricity, construction (2.91%), and manufacturing (0.92%) activities, with growth rates, respectively.
However, marked contraction was observed in the mining and quarrying subsector which shrunk by 61.36 per cent compared with 45.89 and 29.01 per cent contractions in the preceding and corresponding quarters of 2023 respectively.
