Nigeria’s economy grew by 3.84% year-on-year in real terms in the fourth quarter of 2024, according to the latest data from the National Bureau of Statistics (NBS). This marks an improvement from the 3.46% recorded in Q4 2023 and the preceding quarter (Q3 2024), reflecting stronger-than-expected economic performance despite ongoing macroeconomic challenges.
The 3.84% growth rate exceeded the government’s full-year GDP growth projection of 3.75% for 2024, denoting that Nigeria’s economy performed better than initially anticipated.
Analysts had predicted a slowdown below the 3.75% target, citing inflationary pressures, currency volatility, and weak consumer demand. However, the latest figures indicate that several key sectors, particularly services and non-oil industries, outperformed expectations.
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According to the NBS report: “Nigeria’s Gross Domestic Product (GDP) grew by 3.84% (year-on-year) in real terms in the fourth quarter of 2024. This growth rate is higher than the 3.46% recorded in the fourth quarter of 2023 and the third quarter of 2024 growth rate (approximately 3.46%).”
The positive economic expansion provides a boost for policymakers who have been pushing for economic diversification, reducing the country’s dependence on oil revenue.
Sectoral Breakdown: Services Lead Growth as Oil Sector Struggles
The Q4 2024 GDP growth was largely driven by the Services sector, which expanded by 5.37% and contributed 57.38% to the total GDP. The sector’s strong performance offset weaknesses in the oil industry, which recorded only 1.48% growth, a sharp decline from 12.11% in Q4 2023.
Nigeria’s average daily crude oil production stood at 1.54 million barrels per day (mbpd) in Q4 2024, slightly lower than the 1.56 mbpd in Q4 2023 but an improvement from 1.47 mbpd in Q3 2024.
Despite an uptick in production, the sector’s GDP growth fell significantly, contributing only 4.60% to the economy, down from 4.70% in Q4 2023 and 5.57% in Q3 2024. The full-year growth for the sector stood at 5.54%, marking a recovery from the -2.22% contraction in 2023, but still below expectations given Nigeria’s vast oil reserves.
The non-oil sector expanded by 3.96% in Q4 2024, an increase from 3.07% in Q4 2023 and 3.37% in Q3 2024. It accounted for 95.40% of total GDP, further solidifying its dominance over the oil sector.
The financial and insurance sector was among the top performers, growing by 27.78%, with its GDP contribution rising to 6.10%, up from 4.95% in Q4 2023. The telecommunications sector also performed well, expanding by 5.90%, with its GDP share increasing to 17.00%, compared to 16.66% in Q4 2023.
Trade recorded 1.19% growth, slightly down from 1.40% in Q4 2023, but higher than 0.65% in Q3 2024. Manufacturing expanded by 1.79%, improving from 1.38% in Q3 2024, although its GDP share declined to 8.07%. The transportation sector rebounded strongly, growing by 18.61%, a sharp turnaround from the -29.00% contraction in Q4 2023.
Some industries, however, struggled. The electricity and gas sector contracted by -5.04%, a steep drop from the 6.17% growth recorded in Q4 2023. The construction sector also slowed, posting 2.95% growth, compared to 3.70% in Q4 2023.
Nigeria to Rebase GDP and CPI in 2025 to Improve Economic Accuracy
The government has announced plans to rebase the country’s GDP and Consumer Price Index (CPI) by 2025.
Rebasing GDP involves updating the base year used for economic calculations, ensuring that new and emerging sectors are better captured in official statistics. Nigeria last rebased its GDP in 2014, then, it was Africa’s largest economy. With the upcoming rebasing, experts believe Nigeria could reclaim the top spot from South Africa, which currently holds the position.
The rebasing of the Consumer Price Index (CPI) is also expected to provide a more accurate measure of inflation, reflecting changes in consumer behavior and spending patterns.
The move is expected to enhance investor confidence by providing more accurate data for decision-making.
What This Means for Nigeria’s Economy in 2025
The better-than-expected GDP growth in Q4 2024 underscores a positive economic trajectory. The GDP rebasing in 2025 is expected to improve Nigeria’s economic ranking, particularly if the new methodology captures the expansion of digital industries, fintech, and other high-growth sectors.
However, with the oil sector’s contribution to GDP shrinking, Nigeria’s economic resilience is increasingly dependent on non-oil industries such as telecoms, finance, and trade. Economists note that this shift highlights the need for continued economic diversification and investment in infrastructure to support growth in key sectors.