Nigeria’s GDP slows to 2.31% in Q1’23 amid cash scarcity, says NBS
By Luther Animashaun & Onome Amuge
Nigeria’s economic growth rate slowed to 2.31 per cent in the first quarter of 2023 due to the adverse effects of the cash crunch experienced during the quarter, according to data released by the National Bureau of Statistics (NBS).
The NBS, in its latest gross domestic product (GDP) report for Q1 2023, said the GDP grew by 2.31 per cent year-on-year in real terms in the reviewed period from 3.52 per cent in Q4 2022 and 3.11 per cent in the corresponding period of 2022.
It explained that the government’s plan to replace old banknotes with newly designed ones,which disrupted trade and payments on a national level, contributed largely to the economic slowdown.
Despite the slowdown,the NBS data noted that Africa’s largest economy has grown for ten consecutive quarters after a severe recession in 2020 linked to the COVID-19 pandemic.
The NBS report noted that the performance of the GDP in the first quarter of 2023 was driven mainly by the Services sector, which recorded a growth of 4.35 per cent and contributed 57.29 per cent to the aggregate GDP.
Meanwhile, the agriculture sector grew by -0.90%, lower than the growth of 3.16 per cent recorded in the first quarter of 2022.
“Although the growth of the industry sector improved to 0.31% relative to – 6.81% recorded in the first quarter of 2022, agriculture, and the industry sectors contributed less to the aggregate GDP in the quarter under review compared to the first quarter of 2022,” the report said.
The report further showed that in the quarter under review, aggregate GDP stood at N51,242,151.21 million in nominal terms. This performance, the NBS explained, is higher when compared to the first quarter of 2022 which recorded aggregate GDP of N45,317,823.33 million, indicating a year-on-year nominal growth of 13.07 per cent.
A breakdown of the oil sector’s performance relating to the economy, showed that the real growth of the oil sector was –4.21 per cent year-on-year in Q1 2023, indicating an increase of 21.83 percentage points relative to the rate recorded in the corresponding quarter of 2022, which stood at -26.04 per cent. Also, growth increased by 9.18 percentage points when compared to Q4 2022 which was –13.38 per cent.
On a quarter-on-quarter basis, the report said the oil sector recorded a growth rate of 20.68 per cent in Q1 2023. This is as the oil sector contributed 6.21 per cent to the total real GDP in Q1 2023, down from the figure recorded in the corresponding period of 2022 and up from the preceding quarter, where it contributed 6.63 per cent and 4.34 per cent respectively.
During the reviewed period, Nigeria recorded an average daily oil production of 1.51 million barrels per day (mbpd), higher than the daily average production of 1.49mbpd recorded in the same quarter of 2022 by 0.01mbpd and higher than the fourth quarter of 2022 production volume of 1.34 mbpd by 0.17mbpd.
The non-oil sector recorded a growth of 2.77 per cent in real terms in Q1 2023. This rate was lower by 3.30 percentage points compared to the rate recorded in the same quarter of 2022 and 1.67 percentage points lower than the fourth quarter of 2022.
The NBS report stated that the non-oil sector was driven in the first quarter of 2023 mainly by information and communication; financial and insurance ; trade; manufacturing (Food, Beverage & Tobacco); construction; and transportation & storage, accounting for positive GDP growth.
In real terms, the non-oil sector contributed 93.79 per cent to the nation’s GDP in the first quarter of 2023, higher than the share recorded in the first quarter of 2022 which was 93.37 per cent and lower than the fourth quarter of 2022 recorded as 95.66 per cent.