Kelvin Bowoto
Despite strong fiscal and monetary intervention measures implemented by previous and current administrations at the central and sub-national levels, Nigeria’s economy has fallen below all projections and is now experiencing negative growth.
The government-owned National Bureau of Statistics (NBS) revealed data on the nation’s economy on Tuesday, indicating that the gross domestic product (GDP) would grow negatively in 2023, contrary to numerous estimates. “On an annual basis, GDP grew by 2.74 percent in 2023 relative to 3.10 percent in 2022,” the NBS stated Wednesday.
Former President Muhammadu Buhari’s poor economic management, rising inflation, and supply chain disruptions largely caused by insecurity, along with nationwide hardship following the removal of fuel subsidies by President Bola Tinubu’s administration since taking office on May 29, may have combined to bring the economy to an unenviable state.
The country’s full-year GDP growth is lower than the World Bank and International Monetary Fund (IMF) projections.
The IMF and World Bank expected Nigeria’s economic growth rate to fall from 3.3% in 2022 to 2.9% in 2023. The federal government had also forecasted that the economy would rise to 3.5% in 2023 with the execution of some macroeconomic stabilization initiatives pushed by the previous administration.
However, the economy expanded by 3.46 percent (year over year) in real terms in the fourth quarter of 2023.
The growth rate is lower than the 3.52 percent recorded in the fourth quarter of 2022 but better than the 2.54 percent increase in the third quarter of 2023.
According to the statistics agency, the GDP performance in the fourth quarter of 2023 was primarily driven by the services sector, which grew by 3.98 percent and contributed 56.55 percent of the aggregate GDP. The agriculture industry rose by 2.10 percent, up from 2.05 percent in the fourth quarter of 2022.
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The industry sector grew by 3.86 percent, up from -0.94 percent in the fourth quarter of 2022. In terms of GDP share, the industrial and services sectors contributed more to aggregate GDP in Q4 2023 than in Q4 2022. On an annual basis, GDP increased by 2.74 percent in 2023, compared to 3.10 percent in 2022.
According to the NBS, aggregate GDP in the quarter under review was N65,908,258.59 million in nominal terms. The performance is better than in the fourth quarter of 2022, when aggregate GDP was N56,757,889.95 million, representing a nominal growth rate of 16.12 percent year on year.
Nigeria’s economy is broadly divided into two sectors: oil and non-oil.
According to the NBS statistics provided yesterday, real growth in the oil industry was 12.11 percent (year on year) in Q4 2023, representing a 25.50 percent rise over the rate recorded in the same quarter of 2022 (-13.38 percent). Growth also climbed by 12.96 percentage points compared to Q3 2023, which was -0.85 percent. The oil sector provided 4.70 percent of total real GDP in Q4 2023, up from the number recorded in the same period in 2022 but down from the previous quarter, when it contributed 4.34 percent and 5.48 percent, respectively.
In contrast, the non-oil sector provided 95.30 percent of the nation’s GDP in the fourth quarter of 2023, a lower share than in the fourth quarter of 2022 (95.66 percent) but higher than in the third quarter of 2023 (94.52 percent).
The mining and quarrying sector, which contributes significantly to the nation’s economic output, expanded by 8.04 percent (year on year) in the fourth quarter of 2023. In comparison to the same quarter of 2022 and the third quarter of 2023, it increased by 19.43 percentage points and 10.01 percentage points, respectively. The quarter-on-quarter growth rate was -2.38 percent.
The sector’s annual growth rate in 2023 was -2.84%, up from -18.16% in 2022. The contribution of mining and quarrying to real GDP in the quarter under review was 4.91 percent, up from 4.71 percent in the same quarter of 2022 but down from 5.64 percent in the third quarter of 2023.
Techrectory with Agency Report.
