The National Bureau of Statistics (NBS) has reported a 3.46% growth in Nigeria’s Gross Domestic Product (GDP) for the third quarter of 2024, marking an increase from the 3.19% growth in Q2 2024 and the 2.54% recorded in Q3 2023.
This development highlights a consistent upward trajectory in economic activity, with the services sector taking the lead as a major driver of this growth.
According to the NBS, the services sector recorded a robust growth rate of 5.19%, contributing a significant 53.58% to the aggregate GDP. This underscores the increasing dominance of the services sector in Nigeria’s economy, reflecting expansion in areas such as telecommunications, trade, and financial services.
The industrial sector also witnessed a recovery, growing by 2.18%, a significant improvement from the 0.46% growth recorded in Q3 2023. Meanwhile, the agriculture sector, which has traditionally been a cornerstone of Nigeria’s economy, expanded modestly by 1.14%, slightly lower than the 1.30% growth in the same quarter of the previous year.
“The agriculture sector grew by 1.14%, from the growth of 1.30% recorded in the third quarter of 2023,” the statistics firm said.
“The growth of the industry sector was 2.18%, an improvement from 0.46% recorded in the third quarter of 2023.
“In terms of share of the GDP, the services sector contributed more to the aggregate GDP in the third quarter of 2024 compared to the corresponding quarter of 2023.”
The oil sector, buoyed by an increase in average daily production to 1.47 million barrels per day (mbpd), grew by 5.17% year-on-year, marking a notable recovery from the -0.85% contraction recorded in Q3 2023. Despite this growth, the oil sector’s contribution to the overall GDP remained limited at 5.57%, underscoring the continued shift toward a non-oil-driven economy.
“The real growth of the oil sector was 5.17% (year-on-year) in Q3 2024, indicating an increase of 6.02% points relative to the rate recorded in the corresponding quarter of 2023 (-0.85%), the NBS said.
“Growth decreased by 4.98% points when compared to Q2 2024 which was 10.15%. On a quarter-on-quarter basis, the oil sector recorded a growth rate of 7.39% in Q3 2024.
“The Oil sector contributed 5.57% to the total real GDP in Q3 2024, up from the figure recorded in the corresponding period of 2023 and down from the preceding quarter, where it contributed 5.48% and 5.70% respectively.”
The non-oil sector, which includes critical areas such as telecommunications, manufacturing, and crop production, contributed a substantial 94.43% to the GDP, reflecting a real growth rate of 3.37%.
“In real terms, the non-oil sector contributed 94.43% to the nation’s GDP in the third quarter of 2024, lower than the share recorded in the third quarter of 2023 which was 94.52% and higher than the second quarter of 2024 recorded as 94.30%,” NBS added.
In nominal terms, the GDP for Q3 2024 was valued at N71.13 trillion, compared to N60.66 trillion in Q3 2023, representing a year-on-year nominal growth rate of 17.26%. However, real GDP, which accounts for inflation, paints a less buoyant picture, as the escalating cost of living has eroded much of the economic gains for the average Nigerian.
Under The Shadow of Inflation
The optimism surrounding this improvement is tempered by the harsh reality of soaring inflation, which reached 33.8% in October 2024, casting a long shadow over the nation’s economic progress.
For many Nigerians, the encouraging GDP growth figures offer little solace in the face of relentless inflation. At 33.8%, inflation remains a critical issue, driving up the costs of essential goods and services and significantly impacting the standard of living. Analysts argue that while GDP growth is a positive indicator, its effects are often imperceptible to ordinary citizens when inflation continues to rise unabated.
The average Nigerian family is spending more on food, transportation, and housing, which leaves little room to benefit from broader economic growth.
The soaring inflation has led to an erosion of purchasing power, with food prices particularly hit hard. Households now spend a disproportionate share of their income on basic necessities, further exacerbating poverty levels in the country.
Against this backdrop, citizens see little evidence of economic improvement in their daily lives. The persistent gap between reported economic growth and actual living conditions highlights the challenges of ensuring that macroeconomic gains are inclusive and broadly shared.
To address these challenges, economists have advised the government to prioritize policies that can stimulate sustainable growth while addressing inflation. Specifically, they have called for a focus on boosting revenue generation through increased oil production and diversification of the economy.
While the GDP growth figures for Q3 2024 are a testament to Nigeria’s economic resilience, analysts believe that they also serve as a reminder of the work that remains to be done. Some have noted that high inflation makes it imperative for policymakers to adopt strategies that not only boost growth but also address the cost of living crisis.
