In the second quarter of 2022, Nigeria’s economy grew more than expected, which experts disclosed was majorly driven by the growth in the non-oil sector, despite the country being Africa’s biggest crude oil producer.
The economy witnessed a 3.54 percent increase in the second quarter of 2022, up from a growth rate of 3.11 percent in the first quarter. The economic growth rate declined from 5.01 percent in the second quarter of 2021, when rapid growth was recorded, following the toll the covid-19 pandemic exacted on the economy in the second quarter of 2020.
In addition, the recent rising prices have adversely impacted Q2 2022 performances. Analysts disclose that the Nigerian economy has shown signs of resilience in the face of the rivalry between Russia and Ukraine, which affected global economies.
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The Bloomberg consensus estimated economic growth of 2.9 percent, which they expected the drag from the oil sector to diminish further, but the non-oil sectors performed well, beating analysts’ estimates.
Also, analysts at Lagos-based financial derivatives Company Limited (FDC), led by economic expert Bismarck Rewane, disclosed that the economy appeared to be looking up, suggesting that the economy could be on the mend.
However, despite the growth in Nigeria’s economy recorded in Q2 of 2022, there are some sectors that performed woefully.
Here Is A List Of The Worst Performing Sectors in Q2 2022
1.) Oil Refining
The oil refining sector contracted by -42.12 percent in the second quarter of 2022, compared with a contraction of -46.78 percent in the same period last year. The sector has also recorded a contraction of -44.26 percent in the first quarter of 2022.
It is no surprise that this sector underperformed, as Nigeria continues to refine almost none of its crude oil, with a large amount of exorbitant fees spent importing refined petroleum products in the country, which always exceeded the revenue generated in exports.
If only modular refineries are set up across different regions in the country, this will reduce or eliminate fuel importation, which would save money spent on importation and subsidies and will reduce pressure on foreign exchange.
2.) Rail Transport And Pipelines
The rail transport and pipelines sector contracted -37.90 percent in the second quarter of 2022, compared with a growth of 53.28 percent in the second quarter of 2021.
The sector recorded a growth of 124.54 percent in the second quarter of 2021. The sector also recorded a growth of 124.54 percent in the first quarter of 2022.
Last year economic experts and operators in the transport sector warned against the continuous vandalization of railway infrastructure across the country by hoodlums, which has continued to hinder the growth of the sector as well as the economy.
Amidst the huge investments and efforts by the government to fully revive the rail sector, vandals have been continuously destroying rail lines and stealing rail slippers. Also, the rail sector, according to analysts, partly suffered from the Abuja-Train attack.
As regards to pipelines in the country, the government spends billions on pipeline maintenance, as hundreds are vandalized annually by some unscrupulous people.
3.) Metal Ores
This sector contracted by -25.48 percent in the second quarter of 2022, compared with a growth of 21.12 percent in the same period of last year.
The sector recorded a growth of 30.76 percent in the first quarter of this year. After about five decades, Nigeria is yet to establish a stable iron and steel sector despite the sector gulping an estimated amount of $7bn.
One of the major complaints militating against the development of the sector is the quality of the local raw materials.
4.) Crude Petroleum And Natural Gas
Crude petroleum and Natural gas contracted by -11.77 in the second quarter of 2022, compared with -12.65 in the same period last year.
The sector shrank by -26.04 percent in the first quarter of 2022.
5.) Electricity, Gas, Steam, And Air Conditioning Supply
Electricity, Gas, Steam, and Air Conditioning supply contracted by -11.48 percent in the second quarter of 2022, compared with a growth of 78.16 percent in the same period last year.
The sector contracted -11.20 percent in the first quarter of 2022.
I was told in 2017 that the refinery will be ready in last quarter of 2018, but till date it is not yet ready after 5years. I know that Saipem handled the construction of the fertilizer plant as an EPC contractor which has long been completed and commissioned..
This refinery thing to me is shrouded in so much technical mysteries. Who is the EPC contractor handling its construction? Why didn’t they built it in smaller modules, like 50,000 -100,000 barrels per day modules and incrementally arrive at the proposed 650_000 in due time..? Where are its components been manufactured..? So many questions.