Nigeria records flat Q3 growth as oil sector contraction slows

People crowd a market place in Lagos, Nigeria December 18, 2021. Picture taken December 18, 2021. REUTERS/Temilade Adelaja/File Photo
Lagos, Nigeria

According to figures released on Friday, Nigeria’s economy grew flat in the third quarter due to a slower decline in the oil industry and the delayed implementation of government measures to increase output.

The largest economy in Africa expanded by 2.54%, up from 2.51% in the second quarter. However, this was still well short of President Bola Tinubu’s goal of at least 6% annual growth, which he had pledged at his inauguration in May.

Tinubu has pledged to reduce instability, increase employment, and remove obstacles to investment. He has launched Nigeria’s most radical changes in decades to increase output, which has remained stagnant for the past ten years. However, they haven’t yet affected growth.

According to the National Bureau of Statistics (NBS), “the services sector, which recorded a growth of 3.99% and contributed 52.7% to the aggregate GDP, was the main driver of the GDP performance in the third quarter of 2023.”

The third quarter saw a 0.85% contraction in Nigeria’s primary oil industry, which generates 90% of the country’s foreign exchange reserves and most of its government revenue. This is an increase of 12.6% from the second quarter when the sector declined by 13.43%.

In the three months leading up to September, the daily average oil output (NGOIL=ECI) increased to 1.45 million barrels per day (mbpd) from 1.20 mbpd during the same time the previous year.

To save the nation from collapsing, Tinubu removed currency restrictions and discontinued a popular but expensive gasoline subsidy in May.
However, his policies have made inflation, which is already in double digits, worse, inflaming the resentment and irritation of a populace facing a crisis in the cost of living. Unions have put pressure on Tinubu to provide workers with respite.

He has traveled to encourage investments to revitalize the economy without depending on borrowing. He has come from Asia, Europe, the Middle East, and the United States.

According to the NBS, the GDP contribution of the industrial and agricultural sectors—which generate employment—was lower in the third quarter of 2023 than in the same period in 2022.

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