Nigeria’s GDP grows by 3.46% in Q3 2024, driven by services sector
…As Tinubu assures of greater economic output
….Oil GDP records slowest growth in 2024
….Unemployment rate slows to 4.3% in Q2 2024
…Nigeria faces increased economic risks amid rising inflation, poverty — Report
By Seun Ibiyemi
Nigeria’s gross domestic product (GDP) grew by 3.46 percent in real terms in the third quarter (Q3) of 2024,representing 0.92 percentage points higher than the rate recorded in Q3 2023 (2.54 percent). It was majorly driven by the services sector.
Similarly, the quarter’s growth was higher by 0.27 percentage points relative to the 3.19 percent recorded in the second quarter (Q2) of 2024. This reflects a higher growth rate when compared to the corresponding quarter (Q3 2023) and the preceding quarter (Q2 2024).
Statistician-general of the federation, Adeyemi Adeniran Adedeji in a statement on Monday, said the major driver of the economy is the services sector, which recorded a growth of 5.19 percent and contributed 53.58 percent to the aggregate GDP.
The economic activity in real terms for Q3 2024 stood at N20.115 trillion, which is higher than the rates recorded in the preceding Q2 of 2024, which stood at N18.285 trillion and the corresponding quarter Q3 2023 which recorded N19.44 trillion.
Agriculture sector in the period grew by 1.14 per cent, from the growth of 1.30 per cent recorded in the third quarter of 2023, also, the growth of the industry sector was 2.18 per cent, an improvement from 0.46 percent recorded in the third quarter 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.
“In the quarter under review, aggregate GDP at basic price stood at N71,131,091.07 million in nominal terms.
“This performance is higher when compared to the third quarter of 2023 which recorded aggregate GDP of N60,658,600.37 million, indicating a year-on-year nominal growth of 17.26 per cent,” the report said.
The report showed that the real growth of the oil sector was 5.17 percent (year-on-year) in Q3 2024, indicating an increase of 6.02 percent points relative to the rate recorded in the corresponding quarter of 2023 (-0.85 percent). Growth decreased by 4.98 per cent points when compared to Q2 2024 which was 10.15 per cent.
The average daily oil production in the period was 1.47 million barrels per day (mbpd), higher than the daily average production of 1.45 mbpd recorded in the same quarter of 2023 by 0.02 mbpd and higher than the second quarter of 2024 production volume of 1.41 mbpd by 0.07 mbpd.
On a quarter-on-quarter basis, the sector recorded a growth rate of 7.39 percent in Q3 2024.
“The oil sector contributed 5.57 percent to the total real GDP in Q3 2024, up from the figure recorded in the corresponding period of 2023 and down from the preceding quarter, where it contributed 5.48 per cent and 5.70 percent respectively,” the report said.
Similarly, the non-oil sector grew by 3.37 percent in real terms in the period, higher by 0.62 percent points compared to the rate recorded in the same quarter of 2023 which was 2.75 percent and higher than the 2.80 per cent recorded in the second quarter of 2024.
“This 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.”
In real terms, the bureau said the non-oil sector contributed 94.43 percent to the nation’s GDP in the third quarter of 2024, lower than the share recorded in the third quarter of 2023 which was 94.52 percent and higher than the second quarter of 2024 recorded as 94.30 percent.
…Oil GDP records slowest growth in 2024
Meanwhile, the latest data from the NBS revealed Nigeria’s oil sector’s GDP growth slowed to 5.17 percent in the third quarter of 2024, down from 10.15 percent recorded in the previous quarter.
However, further findings showed crude petroleum GDP increased by 9.12 percent from 7.64 percent in the second quarter of 2023 to 14.87 percent in Q3 2024.
The nation in the third quarter of 2024 recorded an average daily oil production of 1.47 million barrels per day (mbpd), higher than the daily average production of 1.45 mbpd recorded in the same quarter of 2023 by 0.02 mbpd and higher than the second quarter of 2024 production volume of 1.41 mbpd by 0.07mbpd.
At the start of the year, the country had set its 2024 budget to 1.78 bpd and $77.96 per barrel, however it has failed to meet this goal.
Latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that Nigeria produced 1.5 mbpd in October, its lowest in three months.
Cordros Securities Limited, in its 2024 full-year outlook, projected that the economy will remain on a growth trajectory, supported by improvement in the oil sector amid the government’s ongoing efforts to curb pipeline vandalism and oil theft and, gradual recovery from the impact of policy reforms implemented in the prior year, as well as continued resilience in the services sector.
Large-scale oil theft from pipelines and wells has been one of the country’s biggest challenges in recent years, damaging government finances and limiting the country’s output and exports.
The NNPC and the Ministry of Petroleum had estimated that Nigeria loses between 200,000 and 400,000 barrels of crude oil daily due to theft.
Earlier, Mele Kyari, disclosed that since the crackdown on illegal refineries began in 2022, 8,684 sites—described as “boiling points” rather than actual refineries—have been deactivated.
He also revealed that 6,610 illegal pipeline connections were identified, with 5,913 of them successfully removed.
However, Kyari highlighted that more than 1,000 illegal connections still exist, and new ones are reconnected daily, making the fight against oil theft challenging.
…Unemployment rate slows to 4.3% in Q2 2024
Furthermore, Nigeria’s unemployment rate slowed to 4.3 percent in the second quarter (Q2) of 2024 from 5.3 percent in the first quarter (Q1), the National Bureau of Statistics (NBS) revealed in its latest report.
The Nigeria Labour Force Survey Q2 2024, published on Monday, revealed that the unemployment rate stood at 5.2 percent in urban areas and 2.8 percent in rural regions.
“The labour force participation rate among the working-age population increased to 79.5 percent in Q2 2024 from 77.3 percent in Q1 2024,” the report said, noting that the labour force participation rate in Nigeria rose to 79.5 percent in Q2 2024.
“The participation rates between males and females are nearly the same, with males at 79.9.5 percent and females at 79.1 percent. This minimal difference suggests a balanced level of engagement across genders, indicating that gender is not a significant factor in labour participation,” the report said.
It stated that the employment-to-population ratio was 76.1 percent in Q2 2024, which is an increase of 2.9 percentage points compared to 73.2 in Q1 2024.
However, on a year on year comparison, it shows a slight decrease from Q2 2023 at 77.1 percent.
“A more significant gap exists between those with and without disabilities. While 80.0 percent of individuals without disabilities participate in labour related activities, only 36.7 percent of those with disabilities do, highlighting the need for greater inclusivity and targeted support to improve engagement among PWDs.”
It stated that statistics on informality are key to assessing the quality of employment in an economy.
“The rate of informal employment in Nigeria remains high in Q2 2024 compared to previous quarters., increasing marginally from 92.7 percent in Q1 2024 to 93.0 percent during the reference period,” the report said.
…Nigeria faces increased economic risks amid rising inflation, poverty — Report
In all these, Nigeria’s economy is under heightened threat despite bold reforms in 2023 that have worsened living conditions and shuttered businesses, according to the 2024 Africa Country Instability Index by SBM Intelligence.
The Lagos-based data analytics firm highlighted challenges such as escalating food inflation, widespread insecurity, and increasing poverty, which have intensified the nation’s vulnerability. Additionally, political polarization following the 2023 elections has raised Nigeria’s political risk index.
“Nigeria’s economy continues to deteriorate, marked by surging food inflation, insecurity across all regions, and a growing number of people falling into extreme poverty,” SBM Intelligence reported.
The report linked the decline to controversial reforms implemented by President Bola Tinubu’s administration. These include the removal of petrol subsidies and the unification of the exchange rate, which have strained households and businesses.
Recall that upon assuming office in 2023, President Tinubu removed fuel subsidies to address fiscal imbalances, ending artificially low prices. However, this sparked a cost-of-living crisis, with inflation soaring to a 28-year high. The move provoked protests and social unrest as citizens grappled with declining purchasing power.
In June 2023, the government floated the naira to unify exchange rates, aiming for a market-driven system. Instead, the currency lost over 70% of its value within 18 months, compounding economic instability. High energy costs, volatile exchange rates, and rising interest rates have further squeezed businesses, leading to closures and the exit of multinational companies.
Also, Nigeria’s political and economic risk score climbed from 39 in 2023 to 45 in 2024, indicating a more precarious environment for businesses. The country now shares a similar risk status with Ethiopia, Comoros, Côte d’Ivoire, Benin, and Togo, reflecting broader regional challenges.
Regional Trends
While Nigeria’s situation has worsened, Sub-Saharan Africa saw some improvements. The region’s average risk score dropped to 45.4% in 2024 from 47.7% in 2023. Out of 48 countries, 31 improved their performance, with Angola, Burundi, Chad, Togo, and Madagascar recording significant gains. Angola’s success was driven by reduced governance costs, while Madagascar’s GDP growth rose slightly to 4.4%.
However, other countries, including Nigeria, Botswana, Seychelles, Namibia, and Zimbabwe, saw significant declines. Botswana, for instance, faced a nearly 2% GDP contraction in early 2024, while Zimbabwe struggled with persistent debt and currency crises.
Broader implications
SBM Intelligence noted that East and Southern Africa house many of the worst-performing nations, such as Seychelles, Kenya, Mauritius, Botswana, and Zimbabwe. These findings underscore systemic governance and economic challenges across the continent, with Nigeria’s struggles emblematic of a larger regional crisis.
…As Tinubu assures of greater economic output
Reacting to this, President Bola Tinubu has assured Nigerians of better economic output as the economy continues to expand following the newly released third quarter Gross Domestic Product report by the National Bureau of Statistics.
The growth in GDP shows that President Tinubu’s quest for a more robust boost in the economy and, by extension, a better standard of living for all Nigerians is on course.
The 3.46% growth indicates Nigeria is recovering from the reforms’ unintended effects.
President Tinubu said his administration has not and will never forget his promise of a $1 trillion economy by 2030. He assured that once the economy is rebased by early 2025 to capture its dynamism and record significant changes that have occurred in different sectors, the country will be on its way to shared prosperity.
The latest GDP growth in the third quarter is driven by key sectors such as Agriculture, Transport, Education, Health, Real Estate, Finance and Insurance, ICT, Trade, and Manufacturing.
This performance once again shows that the reforms embarked upon by the Tinubu administration to reposition the economy and ensure better fiscal management are beginning to yield fruits.
The proposed tax reforms also indicate the administration’s resolve to reduce the tax burden on small businesses and spread prosperity to the poor. The new Tax regime seeks to promote equity by reducing what is known as the headquarters effect—a situation where states where company headquarters are based get more benefits because their taxes for the whole nation are remitted—in favour of spatial and demographic equity.
President Tinubu said, “I am excited by the latest report from the National Bureau of Statistics that our economy grew in the third quarter more than last quarter and even beyond projected estimates. While I welcome this development, the latest figure also shows the much work that needs to be done. We won’t rest until Nigerians feel the positive impacts in their pockets and experience a better living standard. My administration remains committed to the welfare of our people.”
