Services sector fuels Nigeria’s 3.84% GDP expansion in Q4 2024

Onome Amuge

Nigeria’s Gross Domestic Product (GDP) expanded 3.84 percent in the fourth quarter of 2024, a 3.46 percent increase from the corresponding quarter in 2023, driven yet again by the services sector.

The figure also marked a slight increase from the previous quarter, which recorded an identical 3.46 per cent growth rate.

The latest GDP data published by  National Bureau of Statistics (NBS) showed that the country’s economy recorded an improvement in the fourth quarter of 2024, with growth rates rising from 3.46 percent to 3.84 percent year-on-year.

The primary driver of this growth was the services sector, which outpaced other sectors with a 5.37 percent expansion, representing 57.38 percent of Nigeria’s GDP.

Although the Nigerian economy recorded a commendable expansion in the fourth quarter of 2024, certain sectors lagged behind the overall growth, according to the latest GDP data from the NBS.

The agriculture sector showed signs of moderation, with a slower growth rate of 1.76 percent in Q4 2024 compared to the 2.10 percent growth in the corresponding period of 2023.

The industry sector also witnessed a downturn in its expansion rate, registering a 2.00 percent growth in Q4 2024, lower than the 3.86 percent recorded in the same quarter of 2023.

Reflecting the broad-based growth of the Nigerian economy in the fourth quarter of 2024, aggregate GDP expanded to N78.37 trillion in nominal terms, representing an 18.91 percent year-on-year surge compared to the N65.91 trillion recorded in the same period of 2023.

For the entire year 2024, Nigeria’s economic output grew by 3.40 percent, surpassing the 2.74 percent growth achieved in 2023, largely attributable to the non-oil sector.

Meanwhile, the oil sector experienced a slight decline in its contribution to GDP, accounting for 4.60 percent in the fourth quarter of 2024 compared to the 4.70 percent recorded in the same period of 2023 and 5.57 percent in the preceding quarter.

Furthermore, Nigeria’s daily crude oil production levels dipped slightly, averaging 1.54 million barrels per day (mbpd) in Q4 2024, compared to 1.56 mbpd in Q4 2023, yet showing improvement from the 1.47mbpd recorded in Q3 2024.

While the oil sector remained a key pillar of the Nigerian economy, the quarterly data revealed a marked slowdown in growth during the fourth quarter of 2024.

The oil sector’s real GDP growth rate dipped to 1.48 percent, a sharp contrast to the 12.11 percent expansion in Q4 2023 and the 5.17 percent growth in Q3 2024. Nonetheless, on an annual basis, the sector managed to post a positive 5.54 percent growth rate for the full year of 2024, indicating a positive turnaround from the negative growth of -2.22 percent registered in 2023.

Nigeria’s non-oil sector yet again emerged as the dominant force in driving the country’s economic expansion, with real GDP growth of 3.96 percent, outpacing both the same period’s performance in 2023 (3.07%) and the previous quarter’s growth (3.37%).

The growth in the non-oil sector translated to an even higher contribution to Nigeria’s GDP, accounting for 95.40 percent of total economic activity, compared to 95.30 percent in the fourth quarter of 2023.

The key industries that contributed to Nigeria’s economic growth in Q4 2024 include financial and insurance services, information and communication (telecommunications in particular), agriculture (with a focus on crop production), trade, transportation and storage (especially road transport), and manufacturing.

Despite posting modest growth in the fourth quarter of 2024, Nigeria’s mining and quarrying sector, comprising crude petroleum, natural gas, and solid minerals, underperformed relative to the same period in 2023, when it recorded an impressive 8.04 percent real GDP growth.

The sector’s contribution to GDP was slightly lower than in Q4 2023, dipping from 4.91 percent to 4.84 percent of total economic activity in the final quarter of 2024.

While agriculture remains a crucial sector for food security and job creation, its real GDP growth rate decelerated to 1.76 percent in Q4 2024, a sharp decline from the 2.10 percent expansion recorded in the fourth quarter of 2023.

Despite the slower overall growth, crop production continued to be the dominant sub-sector, contributing 90.70 percent to the sector’s total GDP.

Although the manufacturing sector saw an increase in real GDP growth rate from 1.38 percent in Q3 2024 to 1.79 percent in the fourth quarter, its contribution to overall GDP slightly decreased to 8.07 percent in Q4 2024, down from 8.23 percent recorded in the same quarter of 2023.

Nigeria’s construction sector registered a real GDP growth rate of 2.95 percent, a drop from the previous year’s performance in Q4 2023, when the sector grew at a slightly higher rate of 3.70 percent.

Despite the slight decline in growth rate, the construction sector’s contribution to GDP remained relatively stable, accounting for 3.44 percent of total economic activity in Q4 2024, a decrease from the 3.47 percent recorded in the same quarter of 2023.

The trade sector recorded a real GDP growth rate of 1.19 percent in the fourth quarter of 2024, down from the 1.40 percent growth rate recorded in the same quarter of the previous year.

While this rate of growth represented a slight decline compared to the previous year, it was nonetheless an improvement from the sector’s performance in the third quarter of 2024, when the trade sector recorded a 0.65 percent expansion.

The financial and insurance sector stood out as a top performer, with a real GDP growth rate of 27.78 percent in Q4 2024, despite a dip from the 29.77 percent growth recorded in the third quarter of 2024.

The expansion of the sector was reflected in its increased contribution to Nigeria’s GDP, jumping from 4.95 percent in Q4 2023 to 6.10 percent in the final quarter of 2024.

The information and communication sector, driven primarily by the telecommunications industry, continued its strong performance in Q4 2024, achieving a real GDP growth rate of 5.90 percent, slightly lower than the 6.32 percent recorded in the corresponding quarter of 2023.

Despite the slight decline in growth, the sector’s overall contribution to Nigeria’s GDP registered an upward trajectory, rising from 16.66 percent in Q4 2023 to 17.00 percent in the fourth quarter of 2024.

Nigeria’s transportation and storage sector recorded a reversal in its performance, with an 18.61 percent growth rate in the fourth quarter of 2024, up from -29.00 percent contraction in the same quarter of 2023.

Despite the growth, the sector’s contribution to GDP remained relatively small, accounting for just 1.26 percent of the overall economy.

In contrast to the overall positive performance of the Nigerian economy, the electricity, gas, steam, and air conditioning supply sector witnessed a downturn, contracting by -5.04 percent in real terms in the fourth quarter of 2024. 

The negative growth rate marked a stark reversal from the sector’s performance in Q4 2023, when it had recorded a growth rate of 6.17 percent. Moreover, the sector’s share of GDP remained small at 0.49 percent.