Nigeria’s economic growth slows to 2.25% in Q3 2022
By Business AM
Nigeria’s economic growth slowed in the third quarter of 2022 compared to a year earlier amid lower oil production and tighter monetary policy to curb soaring inflation.
The Gross Domestic Product (GDP) of Africa’s biggest economy grew by 2.25 percent (year-on-year) in real terms in the three months to September 2022, according to data released Thursday by the state-run National Bureau of Statistics (NBS).
This is a 1.78 percentage points drop from the 4.03 percent growth rate recorded in Q3 2021 and 1.29 percentage points relative to 3.54 percent in Q2 2022.
“The reduction in growth is attributable to the base effects of the recession and the challenging economic conditions that have impeded productive activities,” the NBS said.
Nigeria has maintained a positive growth trajectory, rising for the eighth consecutive quarter, NBS data showed.
Nigeria, Africa’s top oil producer, recorded an average daily oil output of 1.20 million barrels per day (mbpd) in the third quarter of 2022, lower than the daily average of 1.57 mbpd recorded in the same quarter of 2021, the NBS said.
Massive crude oil theft and insecurity in the country’s oil-producing Niger Delta region have combined to slash output and revenues from oil, which accounts for about two-thirds of government revenue and 90 percent of its foreign exchange reserves.
The oil sector grew by 22.67 percent (year-on-year) as of Q3 2022, indicating a decrease of 11.94 percentage points relative to the rate recorded in the corresponding quarter of 2021.
In terms of contribution to GDP, the oil sector contributed 5.66 percent to the aggregate real GDP for the period.
On the other hand, the non-oil sector grew by 4.27 percent in real terms in Q3 2022, 1.18 percentage points lower compared to the rate recorded in the same quarter of 2021 and 0.50 percentage points lower than Q2 2022 figure.
Growth in the non-oil sector was driven 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, according to the NBS.
In terms of GDP contribution, the non-oil sector contributed 94.34 percent to the total GDP, an increase from 93.67 percent recorded in the previous sector.
Nigeria’s central bank (CBN) has since May 2022 adopted a tighter monetary policy, supported by positive economic growth, to counter inflation, which hit a 17-year high of 21.09 percent as at October. The apex bank raised the Monetary Policy Rate (MPR) by a combined total of 500 basis points in the last seven months.