Nigeria’s economic growth slows to 2.25% on low oil production

Nigeria’s gross domestic product (GDP) grew by 2.25 percent year-on-year in Q3 2022, down from 3.54 percent in Q2.

The National Bureau of Statistics (NBS) said this in its latest GDP report for the third quarter of 2022.

The slow growth was due to the country’s low oil production, as output slumped to 1.20 million barrels per day.

According to the NBS, the slow growth is attributable to the base effects of the recession and the challenging economic conditions that have impeded productive activities.

On a year-on-year basis, NBS said the third quarter of 2022 growth rate decreased by 1.78 percent points from the 4.03 percent growth rate recorded in the corresponding quarter in 2021.

“However, quarter-on-quarter, real GDP grew at 9.68 percent in Q3 2022, reflecting a higher economic activity in Q3 2022 than the preceding quarter,” the report reads.

“In the quarter under review, aggregate GDP stood at N52,255,809.62 million in nominal terms.

“This performance is higher when compared to the third quarter of 2021, which recorded aggregate GDP of N45,113,448.06 million, indicating a year-on-year nominal growth rate of 15.83 percent.

“The nominal GDP growth rate in Q3 2022 was higher relative to the 15.41 percent growth recorded in the third quarter of 2021 and higher compared to the 15.03 percent growth recorded in the preceding quarter.”

The report said the non-oil sector grew by 4.27 percent in real terms but was lower by 1.18 percent points compared to the rate recorded same quarter of 2021 and 0.5 percent points lower than the second quarter of 2022.

“This sector was driven in the third quarter of 2022 mainly by Information and Communication (Telecommunication); Trade; Transportation (Road Transport); financial and insurance (financial institutions); agriculture (crop production) and real estate, accounting for positive GDP growth,” the report reads.

“In real terms, the non-oil sector contributed 94.34 percent to the nation’s GDP in the third quarter of 2022, higher than the share recorded in the third quarter of 2021, which was 92.51 percent and higher than the second quarter of 2022 recorded as 93.67 percent.”

However, the oil sector’s growth declined by 10.91 percent points in Q3 2022, compared to a contraction of 11.77 percent recorded in Q2 2022.

“The Oil sector contributed 5.66 percent to the total real GDP in Q3 2022, down from the figures recorded in the corresponding period of 2021 and the preceding quarter, where it contributed 7.49 percent and 6.33 percent, respectively,” the report adds.

Within the period under review, the report added that the nation recorded an average daily oil production of 1.20 million barrels per day (mbpd), lower than the daily average production of 1.57 mbpd recorded in the same quarter of 2021 by 0.37 mbpd and lower than the second quarter of 2022 production volume of 1.43 mbpd by 0.24mbpd.