Nigeria’s economy expands 3.19% in Q2 driven by service sector growth

Business a.m.

Nigeria’s economy, led by the services sector, expanded at a robust pace in the second quarter of 2024, with gross domestic product (GDP) growth clocking in at 3.19 percent, exceeding the growth rate of 2.51 percent recorded in the same quarter of the previous year and the 2.98 percent growth achieved in the preceding quarter, according to recent data by the National Bureau of Statistics. 

The services sector emerged as the primary growth driver in the second quarter of 2024, recording 3.79 percent expansion and contributing 58.76 percent to Nigeria’s aggregate GDP. This sector’s performance, the report showed, propelled the overall economy, underpinning the impressive 3.19 percent GDP growth reported during the period.

The agriculture sector recorded a growth of 1.41 percent, representing a marginal decline from the 1.50 percent expansion recorded in the second quarter of 2023.

The industry sector demonstrated a remarkable turnaround with a 3.53 percent growth, significantly outperforming the -1.94% decline recorded in the corresponding quarter of the previous year. 

The Services sector continued to dominate, accounting for 58.76 percent of the GDP in the second quarter of 2024, outperforming its share of 57.58 percent in the same quarter of 2023.

Nigeria’s aggregate GDP at basic price soared to N60,930,000.58 million in nominal terms in the second quarter of 2024, representing a robust year-on-year increase of 16.94 percent compared to the N52,103,927.13 million recorded in the corresponding quarter of 2023.

In the second quarter of 2024, the oil sector posted a strong real growth of 10.15 percent (year-on-year), a substantial rebound from the -13.43 percent decline recorded in the same quarter of the previous year. This significant improvement, representing a 23.58 percentage point increase relative to the previous year and a 4.45 percentage point increase compared to the preceding quarter.

On a quarter-on-quarter basis, the oil sector contracted by -10.51 percent in the second quarter of 2024, pointing to a volatility in the sector’s growth patterns. Despite this contraction, the sector’s contribution to the total real GDP increased compared to the same quarter of the previous year, standing at 5.70 percent, yet still lower than the preceding quarter’s 6.38 percent and the preceding year’s figure. 

Despite the volatility in the oil sector’s growth, the non-oil sector proved resilient, posting a 2.80 percent real growth rate in the second quarter of 2024. While this rate was marginally lower compared to the corresponding quarter of 2023 (3.58%), it remained largely unchanged from the preceding quarter’s 2.80 percent.

According to the NBS report, “The non-oil sector was driven in the second quarter of 2024 mainly by Financial and Insurance (Financial Institutions); Information and Communication (Telecommunications); Agriculture (Crop production); Trade; and Manufacturing (Food, Beverage, and Tobacco), accounting for positive GDP growth.” 

The non-oil sector continued to be the dominant contributor to the nation’s GDP in real terms, accounting for a share of 94.30 percent in the second quarter of 2024. Although this contribution was marginally lower than the 94.66 percent share recorded in the second quarter of the previous year, it represented an improvement over the first quarter of 2024, which recorded a share of 93.62 percent.