The Nigerian economy recorded a growth of 3.46% in Q3 2024, with the output rising to ₦20.115 trillion, up from 3.19% (₦18.285 trillion) in Q2 2024.
This growth was primarily driven by the non-oil sector, as highlighted in the Central Bank of Nigeria’s recently released Economic Report for the third quarter of 2024.
The report noted that inflation eased during the quarter, largely due to a decline in food prices within the Consumer Price Index basket, supported by the CBN’s restrictive monetary policy stance. Additionally, domestic crude oil production improved, aided by enhanced security measures around oil pipeline infrastructure in the Niger Delta.
Despite ongoing challenges, the CBN stated that the economy continued to expand steadily in Q3 2024. The 3.46% growth marked the third consecutive quarterly expansion, surpassing the 3.19% recorded in Q2 2024 and the 2.54% growth achieved in the same period of 2023.
This growth was attributed to efforts to enhance the business environment, simplify bureaucratic processes, and improve business infrastructure. The banking sector’s recapitalization window, aligned with licensing categories and authorizations, also contributed significantly to growth in the services sector, particularly within the finance and insurance sub-sector.
The government’s focus on increasing crude oil production to a target of 2 million barrels per day by the end of 2024 supported continued positive growth in the oil sector, which expanded by 5.17% year-on-year in Q3 2024. Although this was slower than the 10.15% growth recorded in Q2 2024 due to a decline in Bonny Light crude oil prices from $86.92/b in Q2 2024 to $82.07/b in Q3 2024, production rose from 1.27 million barrels per day (mbpd) to 1.33 mbpd, ensuring a positive contribution to overall growth.
The non-oil sector also accelerated, growing by 3.37% in Q3 2024 compared to 2.80% in the previous quarter. It contributed 3.18 percentage points to total growth, driven by robust performances in financial and insurance services, information and communication, crop production, trade, transportation, storage, and real estate.
Sectoral analysis revealed that agriculture, industry, and services all posted growth in Q3 2024, underlining the broad-based expansion of the Nigerian economy during the period.
The Services sector expanded at the fastest pace by 5.19 per cent in Q32024, compared with 3.79 per cent in Q22024 and 3.99 per cent in Q32023, remaining the most dominant sector, and accounting for 53.58 per cent of aggregate Gross Domestic Product.
Within the services sector, financial & insurance sub-sector grew by 30.83 per cent, compared with 28.79 and 28.21 per cent in the preceding and corresponding quarters of 2023, respectively. This performance was spurred by gains from the recapitalisation exercise that was announced by the CBN, according to the report.
Other factors such as profits from interest gains (following continued hikes in interest rates), consultancy fees, and ATM & transfer fees contributed to the growth of the sub-sector.
Also, given the financial sector’s ongoing digital transformation (including the significant growth of fintech companies, mobile banking, and digital payment systems), the information and communications subsector grew by 5.92 per cent (contributing 0.95pp to GDP growth).
The performance of the ICT sub-sector was further boosted by the ongoing demand for digital services like e-commerce and data/internet services, which helped to grow economic activity in the other sub-sectors like trade and real estate 0.65 and 0.68 per cent, respectively.
The transport and storage sub-sector grew by 12.15 per cent, compared with contractions of 13.53 and 35.85 per cent in the preceding and corresponding quarters of 2023, respectively.
The growth in the Nigerian economy was bolstered by significant improvements in road transport, driven by enhanced security conditions and a shift from air travel due to higher airfares. Investments in road infrastructure and alternative energy sources, such as compressed natural gas (CNG), also contributed to the expansion of this sub-sector.
The agriculture sector experienced modest growth of 1.14% in Q3 2024, slightly below the 1.41% and 1.30% recorded in Q2 2024 and Q3 2023, respectively. Favorable weather conditions and increased harvests of staple crops supported this growth. Crop production expanded by 1.18%, compared to 1.65% in the previous quarter, while forestry and livestock sub-sectors grew by 2.23% and 1.03%, respectively. However, the fishing sub-sector contracted by 1.91%, following a 0.38% growth in Q2 2024.
The industrial sector maintained a positive trajectory, recording a growth of 2.18% in Q3 2024, although this was slower than the 3.53% in Q2 2024 and the 0.46% in Q3 2023. The Industrial Production Index (IPI) reflected this slowdown, growing by 2.04% year-on-year, compared to 4.13% in the preceding quarter. Efforts to enhance crude oil production to 1.33 million barrels per day (mbpd) in Q3 2024 from 1.27 mbpd in Q2 2024 contributed to the sector’s growth, supported by improved security in oil-producing regions.
The mining and quarrying sub-sectors recorded modest growth of 3.27%, down from 7.79% in Q2 2024, but an improvement over the 1.96% contraction in Q3 2023. Excluding oil, the industrial sector grew by 0.87%, slightly above the 0.85% in Q2 2024 but below the 1.04% in Q3 2023. Positive contributions were observed in water supply (9.78%), sewerage waste management (3.23%), and mild expansions in electricity, construction (2.91%), and manufacturing (0.92%).
However, the mining and quarrying sub-sector experienced a sharp contraction of 61.36%, compared to 45.89% and 29.01% contractions in Q2 2024 and Q3 2023, respectively. Despite these setbacks, other industrial activities maintained steady, albeit modest, growth.