Nigeria’s GDP Growth Slows to 2.25% in Q3 as Non-oil Sector Contributes 94.34%
Oil sector accounted for 5.66% as production dropped to 1.20 mbpd Obi: NBS latest poverty report justifies how badly Nigeria is being managed
Nigeria’s Gross Domestic Product (GDP) grew by 2.25 per cent (year-onyear) in real terms in the third quarter of 2022 (Q3 2022), representing a 1.78 per cent decline compared to the 4.03 per cent growth recorded in Q3 2021, the National Bureau of Statistics (NBS) disclosed yesterday.
The GDP figures were released on the day the Labour Party presidential candidate, Mr. Peter Obi, described the recently released 2022 NBS report on the state of poverty in the country as a justification of how badly Nigeria was being managed in terms of investing in the wellbeing of the people.
The Q3 GDP figures showed that slowdown in growth was attributed to the base effects of the recession and the challenging economic conditions which had impeded productive activities in the country.
Growth also decreased by 1.29 per cent when compared to the 3.54 per cent growth rate recorded in the preceding quarter.
This was disclosed in the Nigerian Gross Domestic Product Report (Q3 2022), which was released by the statistical agency.
The NBS, however, noted that quarter-on-quarter, real GDP grew at 9.68 per cent in Q3 2022, reflecting a higher economic activity in Q3 2022 than the preceding quarter.
In the quarter under review, aggregate GDP stood at N52.26 trillion in nominal terms, higher than the N45.11 trillion recorded in Q3 2021, and indicating a year-on-year nominal growth rate of 15.83 per cent.
The nominal GDP growth rate in
Q3 2022 was higher relative to the 15.41 per cent growth recorded in Q3 quarter 2021 and higher compared to the 15.03 per cent recorded in the preceding quarter.
Real GDP was N18.96 trillion in the quarter under review.
The average daily oil production in Q3 stood at 1.20 million barrels per day (mbpd), lower than the 1.57mbpd recorded in Q3 2021 by 0.37mbpd and also lower than the 1.43mbpd in Q2 2022 by 0.24mbpd.
However, the economy was dominated by the non-oil sector which contributed 94.34 per cent to the nation’s GDP in Q3 while the oil sector contributed 5.66 per cent from 6.33 per cent in the preceding quarter.
Essentially, the non-oil sector grew by 4.27 per cent in real term during the quarter in review, though lower by 1.18 per cent compared to the rate recorded same quarter of 2021 and 0.50 per cent lower than Q2 2022.
The sector was driven mainly by information and communication (telecommunication), trade; transportation (road transport); financial and insurance (Financial Institutions); agriculture (crop production), and real estate, accounting for positive GDP growth.
The real growth of the oil sector was – 22.67 per cent (year-on-year) in Q3, indicating a decrease of 11.94 per cent relative to Q3 2021. Growth of the sector also decreased by 10.91 per cent when compared to –11.77 per cent in Q2 2022.
Quarter-on-Quarter, however, the oil sector recorded a growth rate of -1.80 per cent in Q3, the NBS noted.
Agriculture contributed 29.67 per cent to overall GDP in real terms lower than 29.94 per cent in Q3 2021, and higher than 23.24 per cent in the preceding quarter.
Also, the manufacturing sector contributed 8.59 per cent to GDP, lower than 8.96 per cent in Q3 2021, as well as 8.65 per cent in Q2 2022.
Trade’s contribution to GDP was 15.35 per cent, higher than the 14.93 per cent it represented in the previous year, and lower than the 16.81 per cent recorded in the 2022 second quarter.
Trade’s contribution to GDP stood at 15.35 per cent, higher than the 14.93 per cent in the previous year, and lower than the 16.81 per cent recorded in the preceding quarter.
Commenting on the GDP performance, Professor of Finance and Capital Markets, Nasarawa State University, Keffi, Prof. Uche Uwaleke, said the performance further underscored the increasing importance of the non-oil sector.
He said despite a slump in oil sector performance due chiefly to the reduction in oil production to just 1.2 million barrels per day, the economy was still able to expand by 2.25 per cent in the third quarter driven by the non-oil sector which contributed over 94 per cent to GDP.
He said another remarkable development was the improvement in the agricultural sector relative to the previous quarter in spite of the flooding and insecurity in many parts of the country which goes to show that agriculture remains one of the resilient sectors of our economy.
Uwaleke said: “It's equally pertinent to note that, within the non-oil sector, the positive real GDP growth rate recorded in the third quarter was powered mainly from the services sector especially Financial Services, ICT, and Transportation as opposed to Industry and Agriculture where most of the jobs are.
“The manufacturing sector, for example, covering 13 activities recorded a negative real GDP growth rate. The same with electricity and gas.
“The dismal performance of the manufacturing sector reflects the disconnect between the financial services sector and the real sector. It also indicates that the monetary policy tightening stance of the CBN in July and September of 2022 and the resultant high lending rates, may have had an adverse impact on the manufacturing sector coupled with the forex crisis and high energy costs.”
According to him, “The impact of the prolonged ASUU strike equally reflected in the education sector's real GDP which dropped compared to the corresponding period in 2021.
“These factors, including the base effect, will likely result in a lower GDP growth rate in the last quarter of this year. I think real GDP growth rate can be improved if the challenge of oil theft and pipeline vandalism is tackled against the backdrop of favourable crude oil prices.
“Also, in view of the negative impact of monetary policy tightening on economic growth, the CBN is advised to halt further hikes in the Monetary Policy Rate while using its open Market Operations and non-traditional measures including the effective implementation of the currency redesign and eNaira to control the money supply.
“This suggestion is in view of the fact that inflation drivers in Nigeria are non-monetary and policy tightening tends to hurt output growth.”
Obi: NBS Report On Poverty, Justifies How Badly Nigeria is Being Managed
Meanwhile, Obi, has described the 2022 NBS report on the state of poverty in the country as a reflection of how bad Nigeria was doing in terms of investing in the wellbeing of the people.
Obi in a series of tweets noted that roughly 133 million Nigerians are presently multi-dimensionally poor, representing about 63 per cent of Nigerians.
According to the former Anambra State Governor, although most of those affected were in the north, multidimensional poverty was widespread across the country, noting that the report provides some sobering facts.
He said: "First, the rural part of