Nigeria’s Economic Growth Moderates in Q2
Amidst growing uncertainties in the macroeconomic environment, Nigeria’s Gross Domestic Product (GDP) grew by 2.51% year-on-year in real terms in the second quarter of 2023, according to National Bureau of Statistics latest data release.
This growth rate is lower than the 3.54% recorded in the second quarter of 2022 and may be attributed to the challenging economic conditions being experienced, The performance of the GDP in the second quarter of 2023 was driven mainly by the Services sector, which was recorded a growth of 4.42% and contributed 58.42% to the aggregate GDP.
The agriculture sector grew by 1.50%, an improvement from the growth of 1.20% recorded in the second quarter of 2022. The growth of the industry sector was -1.94% relative to -2.30% recorded in the second quarter of 2022.
In terms of share of the GDP, agriculture, and the industry sectors contributed less to the aggregate GDP in the second quarter of 2023 compared to the second quarter of 2022. In the quarter under review, aggregate GDP stood at N52,103,927.13 million in nominal terms.
This performance is higher when compared to the second quarter of 2022 which recorded aggregate GDP of N45, 004,520.89 million, indicating a year-on-year nominal growth of 15.77%. For better clarity, the Nigerian economy has been classified broadly into the oil and non-oil sectors
The nation in the second quarter of 2023 recorded an average daily oil production of 1.22 million barrels per day (mbpd), lower than the daily average production of 1.43mbpd recorded in the same quarter of 2022 by 0.22mbpd and lower than the first quarter of 2023 production volume of 1.51 mbpd by 0.29mbpd.
The real growth of the oil sector was –13.43% year-on-year in Q2 2023, indicating a decrease of 1.66% points relative to the rate recorded in the corresponding quarter of 2022 when it slipped by -11.77%.
Growth also decreased by 9.22% points when compared to Q1 2023 which was –4.21%. On a quarter-on-quarter basis, the oil sector recorded a growth rate of -14.12% in Q2 2023.
The Oil sector contributed 5.34% to the total real GDP in Q2 2023, down from the figure recorded in the corresponding period of 2022 and down from the preceding quarter, where it contributed 6.33% and 6.21% respectively.
The non-oil sector grew by 3.58% in real terms during the reference quarter (Q2 2023). This rate was lower by 1.19% points compared to the rate recorded in the same quarter of 2022 and 0.81% points higher than the first quarter of 2023.
This sector was driven in the second quarter of 2023 mainly by Information and Communication; Financial and Insurance and Trade; Agriculture. This also include Manufacturing (Food, Beverage & Tobacco); Construction; and Real Estate, accounting for positive GDP growth. In real terms, the non-oil sector contributed 94.66% to the nation’s GDP in the second quarter of 2023, higher than the share recorded in the second quarter of 2022 which was 93.67% and higher than the first quarter of 2023 recorded as 93.79%.