Nigeria’s economy is showing signs of a significant turnaround, with a year-on-year growth of 3.19% in real terms in the second quarter of 2024.
This growth rate is higher than the 2.51% recorded in the second quarter of 2023 and higher than the 2.98% growth in the first quarter of 2024.
The Services sector drove the GDP growth, expanding by 3.79% and contributing 58.76% to the aggregate GDP.
The agriculture sector grew by 1.41%, from the growth of 1.50% recorded in the second quarter of 2023.
The industry sector showed significant improvement, growing by 3.53%, an increase from -1.94% recorded in the second quarter of 2023.
Agriculture accounted for 22.6% of Nigeria’s GDP in H1 2024, followed by Info & Communication at 19.8%, Trade at 16.4%, Manufacturing at 8.46%, and Financial & Insurance at 6.57%.
The government’s efforts to diversify the economy is gradually paying off, creating new opportunities for growth and reducing reliance on oil.
“The diversification efforts are paying off gradually, and we’re seeing a more balanced economy,” said Maria Nathaniel, a leading economist. “This is a positive trend that will help Nigeria weather future economic shocks.”
Investment in infrastructure development has also driven growth, improving transportation networks, electricity supply, and telecommunications.
This has made it easier for businesses to operate and for people to access essential services.
Foreign portfolio investments (FPIs) have increased, driven by the government’s efforts to promote investment and trade.
This influx of foreign capital has helped boost economic growth and create new opportunities for businesses and individuals.
Sectoral Contributions and GDP Growth
According to the National Bureau of Statistics, in the second quarter of 2024, the industry and services sectors accounted for a larger share of the aggregate GDP compared to the same quarter in 2023.
The aggregate GDP at basic price stood at N60,930,000.58 million in nominal terms, representing a year-on-year nominal growth of 16.94% compared to N52,103,927.13 million in Q2 2023.
For clarity, the Nigerian economy is broadly classified into two main sectors: oil and non-oil.
This classification provides a clearer picture of the country’s economic performance and growth trends.
Insufficient Pace
Despite progress, experts note that the current growth pace is not sufficient to be properly felt by the ordinary citizens.
The decline in oil production, accounting for less than 7% of GDP, remains a crucial determinant of Nigeria’s economic growth.
“To drive economic growth, we need to focus on increasing oil production and attracting foreign exchange,” Dr. Kayode Adegoke emphasized.
Thankfully, with the new security strategies in place to combat oil theft, findings suggest oil production is now averaging over 1.5 million barrels daily, and Foreign Portfolio Investments (FPIs) have increased significantly in July, paving the way for a stronger Q3.
As Nigeria’s economy continues to rebound, experts predict a significant increase in job creation, economic opportunities, and living standards.
The government’s commitment to sustaining this growth and ensuring it benefits all Nigerians is crucial to the country’s long-term development.
With a projected yearly GDP growth rate above 5%, Nigeria is poised to become a major economic power in the region.
“The future looks bright for Nigeria, and we’re optimistic about the country’s prospects,” said Maria Nathaniel. “However, we must continue to address the challenges ahead, including corruption and inequality, to ensure that growth is inclusive and sustainable.”
