The Nigerian economy grew by 3.46 percent in real terms in the third quarter (Q3) of 2024 as against 2.54 percent recorded in the corresponding period of 2023, driven mainly by services, agriculture and industry, the National Bureau of Statistics (NBS) said on Monday.
The year-on-year report shows that the services sector shone above peers, recording a growth of 5.19 percent and contributing 53.58 percent to the aggregate gross domestic product (GDP).
The industry sector grew by 2.18 percent, which is an improvement from 0.46 percent reported in Q3 of 2023. Similarly, the agriculture sector grew by 1.14 percent in the same quarter but lower than 1.30 percent recorded in Q3 of 2023.
“In terms of share of the GDP, the services sector contributed more to the aggregate GDP in the third quarter of 2024 compared to the corresponding quarter of 2023,” the NBS said.
Sector Performance in Q3, 2024
Oil sector contributed 5.57 percent to the total real GDP but recorded a growth rate of 7.39 percent in the period. The non-oil sector contributed 94.43 percent and grew by 3.37 per cent in real terms in the period.
The non-oil sector was driven in the third quarter of 2024 mainly by financial and insurance (financial institutions); information and communication (telecommunications); agriculture (crop production); transportation and storage (road transport); trade; and construction, accounting for positive GDP growth.
Agriculture sector
Four sub-activities made up the agricultural sector, including crop production, livestock, forestry, and fishing. Agriculture grew by 1.14 percent in the period and contributed 28.65 percent to overall GDP in real terms in Q3 2024, lower than 29.31 percent contribution in the third quarter of 2023 and higher than 22.61 percent in the second quarter of 2024.
The sector grew by 11.29 percent year-on-year in nominal terms in Q3 2024, showing an increase of 0.23 percent points from the same quarter of 2023. Crop production remained the major driver of the sector, as it accounts for 92.28 percent of the overall nominal value of the sector in Q3 of 2024. Quarter-on-quarter growth stood at 57.53 percent in Q3 of 2024.
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Trade
In Q3 of 2024, trade contributed 14.78 percent to the overall GDP, lower than the 15.19 percent in the corresponding period of 2023 and 16.39 percent in the second quarter of 2024.
In real terms, trade’s year-on-year growth stood at 0.65 percent in the third quarter of 2024, which was 0.88 percent points lower than the rate recorded in the previous year at 1.53 percent, and 0.05 percent points lower than in the preceding quarter at 0.70 percent growth rate. Quarter-on-quarter growth stood at -0.79 percent.
Information & Communication
The Information and Communication sector comprises the four activities of telecommunications and information services; publishing; motion picture, sound recording and music production; and broadcasting. Of total real GDP, the sector contributed 16.35 percent in Q3 of 2024, higher than in the same quarter of the previous year in which it represented 15.97 percent and lower than the preceding quarter in which it represented 19.78 percent.
The sector recorded a growth rate of 5.92 percent in real terms, year-on-year, while the quarter-on-quarter growth rate recorded in Q3 of 2024 was -7.01 percent.
The sector contributed 11.30 percent to the total nominal GDP in Q3 of 2024, lower than the rate of 11.57 percent recorded in the same quarter of 2023 and lower than the 14.19 percent it contributed in the preceding quarter.
Manufacturing
The manufacturing sector comprises 13 activities: oil refining; cement; food, beverages and tobacco; textile, apparel, and footwear; wood and wood products; pulp, paper and paper products; chemical and pharmaceutical products; non-metallic products; plastic and rubber products; electrical and electronic; basic metal and iron and steel; motor vehicles and assembly; and other manufacturing.
The growth rate of the sector on a quarter-on-quarter basis stood at 6.74 percent while the real contribution to GDP in Q3 of 2024 was 8.21 percent, lower than the 8.42 percent recorded in the third quarter of 2023 and 8.46 percent recorded in the second quarter of 2024.
Real Estate
In nominal terms, real estate services in the third quarter of 2024 grew by 46.52 percent, higher by 43.70 percent points than the growth rate reported for the same period in 2023 and lower compared to the preceding quarter.
On a quarter-on-quarter, the sector growth rate was 16.15 percent. It contributed 5.43 percent to real GDP in Q3 2024, lower than the 5.58 percent recorded in the corresponding quarter of 2023
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Finance and Insurance Sector
This sector consists of the two subsectors: Financial institutions, and insurance, in which the former accounted for 91.76 percent and the latter 8.24 percent of the sector respectively in real terms in Q3 2024.
Overall, the sector grew at 74.54 percent in nominal terms (year-on-year), with the growth rate of financial institutions at 75.99 percent, and 59.84 percent growth rate recorded for insurance. The overall rate was higher than Q3 2023 by 44.34 percent points, and lower by 12.05 percent points than the preceding quarter.
The contribution of finance and insurance to real GDP totaled 5.51 percent, higher than the contribution of 4.36 percent recorded in Q3 of 2023 by 1.15 percent points and lower than 6.57 percent recorded in Q2 2024 by 1.06 percent points.
Analysts Speak
Analysts at CardinalStone explained in their GDP report that the non-oil sector profited from an uptick in services, following recovery in the transport sector. In addition, the sustained rate hike by the Central Bank of Nigeria (CBN) supported core banking activities, with a positive pass-through to the finance and insurance sectors.
They said that despite the 24.3 percent year-on-year decline in telecommunication subscriber growth, the ICT sector expanded by 5.9 percent (vs 4.4 percent in the second quarter of 2024), possibly linked to increased average data consumption per user.
“Overall, we estimate that the services sector will remain the cornerstone of GDP growth, underpinning our full year 2024 of 3.2 percent vs 2.7 percent in 2023,” CardinalStone analysts stated.
Also, analysts at Afrinvest said in their GDP note that the real GDP growth was jointly driven by sturdy expansion in both the oil and non-oil segments.
“Precisely, the oil economy expanded for the third consecutive quarter since the pandemic by 5.2 percent year-on-year, though the momentum trailed Q1 and Q2:2024 performances of 5.7 percent and 10.2, respectively.
“We note that the average daily crude oil output also improved modestly in Q3 to 1.47 mbpd compared to 1.41 mbpd in Q2. Notwithstanding, the crude oil output level remains significantly short of the 1.78mbpd baseline set in the 2024 budget, and the 13-quarter peak of 1.57mbpd achieved in Q1:2024,” they further said.
However, they added that from a sectoral perspective, the services sector remains the leading driver of the overall economy growth, up 5.2 percent year-on-on-year compared to 3.8 percent in the second quarter of 2024.
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