Nigeria’s Q3 GDP growth slows as oil sector contraction drags–NBS

The volume of goods and services produced in Nigeria between July 2023 and September grew by 2.54 per cent the National Bureau of Statistics has said. NBS said that the economy recorded flat growth in the third quarter, as the oil sector contracted at a slower pace while the impact of government reforms aimed at boosting output were yet to take effect. The economy its said economy expanded by 2.54 per cent which is a far cry from the ever growing population at 3 per cent. The growth is up from the 2.51 per cent posted in the second quarter, but far from President Bola Tinubu’s ambition to expand the economy by at least 6 per cent a year, which he promised during his inauguration in May. Tinubu has vowed to lift barriers to investment, create jobs and tackle insecurity. He has embarked on reforms to try to boost output, which has been sluggish for about a decade. But they have yet to impact growth.

The NBS said “the performance of the GDP in the third quarter of 2023 was driven mainly by the services sector, which recorded a growth of 3.99 per cent and contributed 52.7 per cent to the aggregate GDP”. Nigeria’s dominant oil sector, which accounts for the bulk of government revenue and 90% of foreign-exchange reserves, contracted 0.85 per cent in the third quarter, a rise of 12.6 per cent from the second quarter when the sector shrank by 13.43 per cent. Daily average oil output stood at 1.45 million barrels per day (mbpd) in the three months to September, up from the 1.20 mbpd in the same period last year.

Tinubu in May scrapped a costly but popular petrol subsidy and lifted currency controls, which he said was to save the country from going under. But his actions have worsened inflation currently in double-digits, fuelling anger and frustration for a population grappling with a cost of living crisis. Tinubu has been under pressure from unions to offer relief to workers. He has travelled from Asia, Europe, Middle East and United States to promote investments to try to revive the economy rather than relying on borrowing. The NBS said the agriculture and industrial sectors, which create jobs, contributed less to GDP in the third quarter of 2023, compared with the same quarter a year ago.