Posted Tue, Aug 27, 2024 8:21 PM

The Nigerian Economy picked up in 2024Q2

Download the GDP Alert 2024 Q2 

The Nigerian economy grew by 3.19 percent in 2024Q2, representing a fast pace of expansion compared to the growth of 2.98 percent in 2024Q1. The country posted a cumulative growth of 3.1 percent in the first half of 2024. On a quarterly basis, the real Gross Domestic Product (GDP) grew marginally by 0.04 percent in 2024Q2 compared with a contraction of 16.1 percent in 2024Q1. The oil and non-oil sectors contributed to the overall growth, but growth in the former outpaced that of the latter. The oil sector grew faster by 10.2 percent in 2024Q2 than 5.7 percent in 2024Q1. Conversely, the non-oil sector expanded by 2.8 percent in 2024Q2, the same growth recorded in 2024Q1. The sustained growth in the oil sector was driven largely by the improvement in domestic crude oil production and global oil prices. The average domestic crude oil production rose to 1.4 million barrels per day (mbpd) in 2024Q2 from 1.2mbpd in 2023Q2. On the other hand, global oil prices increased by 8.7 percent (year-on-year) in 2024Q2.

Note: The average official exchange rate of N1,386.5/US$ was used for currency conversion

Data: NBS; Chart: NESG Research

The three (3) broad sectors recorded growth in 2024Q2. However, the economic growth in the quarter was largely driven by the Services sector (with a growth of 3.8 percent), followed by Industry (3.5 percent) and Agriculture (1.4 percent). The perennial insecurity challenges continue to slow down the crop production sub-sector, which grew by 1.65 percent in 2024Q1 relative to 1.82 percent and 1.71 percent in 2023Q2 and 2024Q1, respectively. This suggests that unless proactive steps are taken to curtail insecurity in the food-producing regions, food inflation is likely to resume its upward trend going forward. The Industrial sector received a boost from the sustained growth recorded by the crude petroleum and natural gas sub-sector. Meanwhile, in 2024Q2, key activity sectors, including Manufacturing and Construction, continued to struggle with growth at 1.3 percent and 1.1 percent, respectively.

In spite of the commencement of the Dangote Refinery, the oil refining sub-sector has yet to recover as it contracted further by 35.4 percent in 2024Q2. This suggests the need to speed up efforts at revitalising the government-owned local refineries. Despite a record of sustained growth in 2024Q2, the Services sector experienced a slowdown on a yearly and quarterly basis. This performance was driven by the subdued performance in the key activity sectors, including Information and Communications Technology (which grew by 4.4 percent in 2024Q2 down from 8.6 percent in 2023Q2), Trade (0.7 percent down from 2.4 percent) and Real Estate (0.8 percent down from 1.9 percent). The sustained performance of the Finance sector at 28.8 percent growth in 2024Q2 could be attributed to the recent drive by some commercial banks to raise their capital base ahead of the CBN’s recapitalisation deadline of 2026.

Download the GDP Alert 2024 Q2