BANKING, INSURANCE SECTORS’ CONTRIBUTION TO GDP DOWN 10% TO N660.84BN

per cent in Q3 2022 (in real term), probably due to the setback in gross premium earnings and gross earnings of some banks and insurance companies during the period.

“This might have contributed to the decline in the contribution of the sector to GDP. In addition, the performance of major sectors in the economy might have dragged down the contribution of finance and Insurance sector to GDP in Q3-2022. For instance, the contribution of Agricultural Sector to GDP increased from 23.24per cent in Q2 2022 to 29.67per cent in Q3 2022, despite the slowdown in country’s GDP.”

The report by NBS disclosed that the Finance and Insurance Sector consists of the two subsectors, Financial Institutions and Insurance, which accounted for 89.99 per cent and 10.01 per cent of the sector respectively in real terms in Q3 2022.

“As a whole, the sector grew at 21.37per cent in nominal terms (year-on-year), with the growth rate of Financial Institutions at 20.65 per cent and a 28.26 per cent growth rate recorded for Insurance. The overall rate was lower than Q3 2021 by 5.09- per cent points, and lower by 8.53 per cent points than the preceding quarter.

“The QoQ growth was -9.40 per cent. The sector’s contribution to the overall nominal GDP was 2.83 per cent in Q3 2022, higher than the 2.70 per cent it represented a year previous, and lower than the contribution of 3.63per cent it made in the preceding quarter.

“Growth in this sector in real terms totalled 12.70per cent, lower by 10.53 per cent points from the rate recorded in the 2021 third quarter and down by 5.78 per cent points from the rate recorded in the preceding quarter. QoQ growth in real terms stood at -10.14 per cent.

“The contribution of Finance and Insurance to real GDP totalled 3.49 per cent, higher than the contribution of 3.16 per cent recorded in the third quarter of 2021 by 0.32 per cent points, and lower than 4.25 per cent recorded in Q2 2022 by 0.77 per cent points.”

Despite decline in financial institutions contribution to real GDP in Q3 2022, banking lending to real sector and Central Bank of Nigeria (CBN) intervention in the economy has witnessed significant increase.

For instance, banks credit to private sector added N5.32 trillion to N40.8 trillion as of September 2022 from N35.18 trillion reported in January 20222 by the CBN.

On the insurance sector performance, the Minister of Finance, Budget and Planning, Mrs. Zainab Ahmed had urged insurance operators to address the low contribution of the sector to the country’s GDP, calling on stakeholders to develop new innovative products based on data and customer preferences and introduction of new channels of distribution beyond the traditional channels to reach new segments of the market.