Nigeria’s GDP growth slows to 2.25% in Q3 2022

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Gross Domestic Product of Nigeria (GDP) grew by 2.25% year-on-year in the third quarter of 2022, marking the slowest growth since the Covid-19 pandemic.

This information is according to the latest GDP report from the National Bureau of Statistics (NBS).

According to the NBS, the slow growth is attributed to the basic effects of the recession and difficult economic conditions that have impeded productive activities.

The growth rate of the third quarter of 2022 decreased by 1.78% points from the growth rate of 4.03% registered in the third quarter of 2021 and 1.29% points in relation to the 3.54% in the second quarter of 2022.

In nominal terms, aggregate GDP stood at Naira 52.26 trillion in the quarter under review, representing a growth of 15.83% compared to Naira 45.11 trillion in the corresponding period of 2021. The growth of the third quarter of 2022 is higher compared to the 15.03% and 15.41% registered in the second quarter of 2022 and the third quarter of 2021 respectively.

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The Oil Sector: This sector registered -22.67% (year-on-year) as of 3Q 2022, which indicates a decrease of 11.94% points with respect to the rate registered in the corresponding quarter of 2021.

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Likewise, the growth rate decreased 10.91 percentage points compared to the contraction of 11.77% registered in the previous period.

  • The Oil sector contributed 5.66% of total real GDP in 3Q 2022, below the figures registered in the corresponding period of 2021 and the previous quarter, where it contributed 7.49% and 6.33%, respectively .
  • In the third quarter of 2022, Nigeria recorded an average daily oil production of 1.20 million barrels per day (mbpd), lower than the average daily production of 1.57 mbpd recorded in the same quarter of 2021 by 0.37 mbpd.
  • It is also lower than the 1.43 mbpd registered in the previous quarter.

Non-oil sector: For its part, the non-oil sector grew 4.27% in real terms during the reference quarter (3Q 2022). This rate was 1.18% lower than that registered in the same quarter of 2021 and 0.50% lower than that of the second quarter of 2022.

Growth in the non-oil sector was mainly driven by Information and Communication (Telecommunications), Commerce, Transportation (Road Transportation), Finance and Insurance (Financial Institutions), Agriculture (Crop Production). and Real Estate, which represents positive GDP growth.

In terms of contribution to GDP, the non-oil sector contributed 94.34% of total GDP, higher than the 93.67% registered in the previous sector, while the oil sector contributed 5.66% to aggregate real GDP for the period .

A further breakdown of the report showed that the agricultural sector contributed 29.67% to aggregate GDP, an increase from the 23.24% registered in the previous quarter and a decrease of 29.94% compared to the same period in 2021.

Industries, on the other hand, recorded a decrease in their contribution from 19.4% in the second quarter of 2022 to 18.37% in the review quarter. Meanwhile, services contributed 51.96% of the national GDP, a significant drop from 51.35% in the second quarter of 2022.

What does this mean: The decline in Nigeria’s GDP growth indicates a drop in the economy’s productivity due to recurring contraction in the oil sector and low growth in key non-oil sectors such as transport, banking and education.

  • This implies that Nigeria’s economic activities grew in the third quarter compared to the corresponding period in 2021, albeit at a slower rate compared to the previous period.
  • Growth in the third quarter of 2022 (2.25%) represents the slowest GDP growth in the last six quarters.

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