‘Oil output dropped, agric sector improved’ — what Q2 GDP figures say about Nigeria’s economy

According to data from the National Bureau of Statistics (NBS), Nigeria’s gross domestic product (GDP) grew by 3.19 percent year-on-year in the second quarter (Q2) of 2024.

The growth rate, the bureau said, surpassed the 2.51 percent recorded in Q2 2023 and the 2.98 percent seen in Q1 2024.

The NBS report was released within 24 hours after Ngozi Okonjo-Iweala, director-general of the World Trade Organisation (WTO), said Nigeria’s average GDP growth rate has been steadily declining since 2014, reflecting a drop in the economic wellbeing the citizens.

Reacting to the NBS report, President Bola Tinubu had said the figures showed that the economy is on the right track.

A statement from Bayo Onanuga, the presidential aide, said the report confirms the economy’s recovery, following earlier data showing a decline in food and headline inflation.

“As the President said in his August 4, 2024 national broadcast, our economy is recovering. Sooner than later, Nigerians will begin to feel, see, and enjoy the impact of his administration’s economic re-engineering efforts,” the presidency said.

The GDP represents the total market value of all final goods and services produced within an economy in a given period of time.

TheCable highlights critical aspects of the latest NBS report which examine the health of Africa’s fourth largest economy under the incumbent government led by Tinubu.

AVERAGE OIL PRODUCTION FELL TO 1.4 MILLION BPD

In the period under review, Nigeria’s average daily oil production stood at 1.41 million barrels per day (bpd). This, the NBS said, is 0.16 million bpd lower than the 1.57 million bpd produced in the first quarter (Q1) of 2024.

However, the report said the Q2 drilling performance represents an increase of 0.19 million bpd when compared with the figure (1.22 million bpd)  recorded in Q2 2023.

According to the data, the oil sector experienced a real growth of 10.15 percent year-on-year in Q2 2024, reflecting an increase of 23.58 percentage points compared to the -13.43 percent recorded in the same quarter of 2023.

“Growth increased by 4.45% points when compared to Q1 2024 which was 5.70%,” the bureau said.

However, on a quarter-on-quarter basis, the sector posted a decline of -10.51 percent in Q2 of this year, the agency said.

The NBS said the sector contributed 5.7 percent to the total real GDP in Q2 2024 — higher than the 5.34 percent recorded in the same period last year, but lower than the 6.38 percent contribution from the previous quarter.

NON-OIL SECTOR REMAINED STAGNANT

TheCable Index analysis also showed that the non-oil sector grew by 2.8 percent in real terms in Q2 2024. The data body said the figure was a decline of 0.78 percentage points from the 3.58 percent growth recorded in the same quarter last year — but steady compared to the 2.8 percent increase seen in Q1 this year.

According to the NBS, the sector’s growth in the quarter examined was primarily driven by financial and insurance institutions, information and communication (telecommunications), agriculture (crop production), trade, and manufacturing (food, beverage, and tobacco) — all contributing to positive GDP growth.

“In real terms, the non-oil sector contributed 94.30% to the nation’s GDP in the second quarter of 2024, lower than the share recorded in the second quarter of 2023 which was 94.66% and higher than the first quarter of 2024 recorded as 93.62%.”

AGRICULTURAL SECTOR CONTRIBUTED 22.61% TO ECONOMY

The NBS said the agricultural sector also grew by 1.41 percent year-on-year in real terms in Q2 2024 — a decrease of 0.09 percentage points compared to the same period in 2023.

However, the figure is an increase of 1.22 percentage points from the previous quarter’s growth rate of 0.18 percent, the report said — adding that the sector saw a growth of 7.35 percent on a quarter-on-quarter basis.

The sector is said to have “contributed 22.61 percent to the total real GDP of Nigeria in Q2 2024”, slightly lower than the 23.01 percent recorded in Q2 2023, but higher than the 21.07 percent contribution in Q1 2024.

MANUFACTURING SECTOR CONTRACTED BY 15.16%

The bureau said real GDP growth in Nigeria’s manufacturing sector was 1.28 percent (year-on-year) in Q2 2024.

The sector’s performance, according to the NBS, marked a decline compared to the same period in 2023 and the preceding quarter, with contractions of 0.92 percentage points and 0.22 percentage points, respectively.

On a quarter-on-quarter basis, the sector contracted by 15.16 percent, the report said.

According to the institution, the manufacturing sector’s real contribution to GDP in Q2 2024 was 8.46 percent — lower than the 8.62 percent recorded in Q2 2023 and the 9.98 percent recorded in Q1 2024.