Posted Tue, Nov 26, 2024 6:42 PM

NESG 2024Q3 GDP ALERT

Download The NESG GDP alert 2024 Q3 Document

The Nigerian Economy sustained improvement in 2024Q3

The Nigerian economy grew faster by 3.5 percent in 2024Q3, compared with the growth of 2.5 percent and 3.2 percent recorded in 2023Q3 and 2024Q2, respectively. The country posted a cumulative growth of 3.2 percent in the first three quarters of 2024, higher than 2.5 percent in the corresponding period of 2023. On a quarterly basis, the economy expanded significantly by 10.0 percent in 2024Q3 compared with a marginal growth of 0.04 percent in 2024Q2. The oil and non-oil sectors contributed to the overall growth but showed mixed performances. Growth in the non-oil sector improved to 3.4 percent in 2024Q3 from 2.8 percent in 2024Q2. However, the oil sector slowed to 5.2 percent in 2024Q3 from 10.2 percent in 2024Q2.  

Note: The average official exchange rate of N1,586.7/US$ was used for currency conversion

Data: NBS; Chart: NESG Research

The three (3) broad sectors recorded growth in 2024Q3. However, the economic growth in the quarter was primarily driven by the Services sector (with a growth of 5.2 percent), followed by Industry (2.2 percent) and Agriculture (1.1 percent). The recent flooding in Borno State–which has already disrupted the early crop harvest season in the state–should provide a warning signal to other major food-producing regions to avert similar occurrences. To reverse the slowdown in Crop production and the Agricultural sector subsequently, the government should complement efforts to curtail insecurity with climate-resilient measures to mitigate the adverse impact of natural occurrences such as flooding and erosion. This would help improve agricultural productivity and reduce the rising food inflation.

Moreover, the non-oil Industrial activities urgently need support to improve their performance. The Manufacturing sector–which accounted for 67.6 percent of the total non-oil industry GDP in 2024Q3–continued to struggle and recorded a growth of 0.9 percent in the quarter due to the subdued performance of the critical sub-sectors–Cement, Textiles, and Food, Beverages & Tobacco. The government should provide stimulus, as well as, an enabling policy and regulatory environment to reduce the cost of doing business. In addition, despite being the best growth performer, growth in the Services sector was sub-optimal as other key sub-sectors, including Trade and Real Estate, lagged the performances of the ICT and Finance sectors. To ensure that the growth momentum in the Services sector is sustained, there is a need to improve consumer spending, ensure exchange rate stability and provide a supportive policy environment.

 

Download The NESG GDP alert 2024 Q3 Document