President Bola Ahmed Tinubu has assured Nigerians of better economic output as the economy continues to expand, following the newly released third quarter Gross Domestic Product report by the National Bureau of Statistics (NBS).
According to the NBS, Nigeria’s GDP grew by 3.46 per cent, compared to the 3.19 per cent growth recorded in the second quarter.
A statement by the Special Adviser to the President on Media and Public Communications, Sunday Dare, said the growth in GDP shows that Tinubu’s quest for a more robust boost in the economy and, by extension, a better standard of living for all Nigerians, was on course.
“The 3.46 per cent growth indicates Nigeria is recovering from the reforms’ unintended effects,” he said.
“President Tinubu said his administration has not and will never forget his promise of a $1 trillion economy by 2030.
“He assured that once the economy is rebased by early 2025 to capture its dynamism and record significant changes that have occurred in different sectors, the country will be on its way to shared prosperity.
“The latest GDP growth in the third quarter is driven by key sectors such as Agriculture, Transport, Education, Health, Real Estate, Finance and Insurance, ICT, Trade, and Manufacturing.
“This performance once again shows that the reforms embarked upon by the Tinubu administration to reposition the economy and ensure better fiscal management were beginning to yield fruits.
“The proposed tax reforms also indicate the administration’s resolve to reduce the tax burden on small businesses and spread prosperity to the poor. The new Tax regime seeks to promote equity by reducing what is known as the headquarters effect – a situation where states, where company headquarters are based, get more benefits because their taxes for the whole nation are remitted – in favour of spatial and demographic equity,” the statement said.
President Tinubu said: “I am excited by the latest report from the National Bureau of Statistics that our economy grew in the third quarter more than last quarter and even beyond projected estimates. While I welcome this development, the latest figure also shows the much work that needs to be done. We won’t rest until Nigerians feel the positive impacts in their pockets and experience a better living standard. My administration remains committed to the welfare of our people.
“The top contributing sectors to GDP in Q3 2024 are Agriculture 28.65 per cent, ICT 16.35 per cent, Trade 14.78 per cent, Manufacturing 8.21 per cent, Crude Oil 5.57 per cent, Finance & Insurance 5.51 per cent and Real Estate 5.43 per cent.”
…NBS report
Meanwhile, the NBS, in a report Monday, said the Nigerian economy grew by about 3.46 per cent in the third quarter of this year, fuelled by activities in the service sector and others, marking a 0.92 percentage point increase from the 2.54% recorded in Q3 2023.
According to the data published by the NBS, the nation’s economy expanded in real term by 3.5 per cent year-on-year (y/y) in the third quarter of 2024, outpacing analysts’ base case projection for the period by 0.34ppt.
On a quarter-on-quarter (q/q) basis, real growth culminated at 10.0 per cent (fastest since 12.0 per cent in the third quarter of 2023), aided in part by low base period effect (q/q real growth came in at a muted 3bps in Q2).
In a breakdown, the NBS listed major contributors to the GDP in real terms during the period under review to include; Crop Production: 26.51% Trade: 14.78%, Telecommunication: 13.94%, and Real Estate which stood at 5.43%.
When classified into broad economic sectors, Agriculture grew by 1.14% in Q3 2024, lower than the 1.30% recorded in Q3 2023, Industry recorded 2.18% growth, improving significantly from 0.46% in Q3 2023, and Services expanded by 5.19%, surpassing the 3.99% growth recorded in Q3 2023.
In the areas of sectoral contributions, Agriculture was 28.65%, Industry 17.77% and Services 53.58%.
The data further showed that while Agriculture and Industry saw slight declines in their contribution compared to Q3 2023, the Services sector recorded its highest contribution yet, with a 0.88 percentage point increase from the same quarter last year.
The oil GDP grew by 5.17% in Q3 2024, a notable recovery compared to the -0.85% contraction in Q3 2023, though it fell short of the 10.15% growth recorded in Q2 2024. The oil sector accounted for 5.57% of the total GDP.
Average daily oil production in Q3 2024 was 1.47 million barrels per day (mbpd), up from 1.45 mbpd in Q3 2023 and 1.41 mbpd in Q2 2024.
Contributing 94.43% to the GDP in real terms, the non-oil sector experienced a slight year-on-year decrease compared to 94.52% in Q3 2023 but outperformed the 94.30% recorded in Q2 2024. This performance was driven by growth in activities such as crop production, trade, telecommunications, and real estate.
The NBS report highlights the continued diversification of the Nigerian economy, with the non-oil sector maintaining a dominant role while the oil sector shows signs of recovery.
…Unemployment drops to 4.3%
In a related development, in the second quarter of 2024 (Q2 2024) unemployment rate declined to 4.3 percent from the 5.3 percent recorded in the first quarter (Q1 2024).
Statistician General of the Federation, Prince Adeyemi Adeniran, disclosed this in a statement titled Q2 2024 Nigerian Labour Force Survey (NLFS).
He said: “The unemployment rate during the period was 4.3 percent, which shows a decrease compared to the rate recorded in Q1 2024 (5.3 percent).”
The NBS boss also said the unemployment rate among persons with upper-secondary education was 8.5 percent in Q2 2024, while the unemployment rate among youths aged (15-24 and 25-34 years) in Q2 2024 was 6.5 percent each and the highest.
Urban unemployment, according to him, was 5.2 percent in Q2 2024, compared with 6 percent in Q1 2024, while unemployment in the rural areas was 2.8 percent, down from the 4.3 percent recorded in Q1 2024.
Adeniran said the share of those in wage employment was 14.4 percent in Q2 2024, a marginal decrease from the 16 percent recorded in Q1 2024.
He said the rate of informal employment, which is the share of employed persons working in the informal sector and informal employment (including agriculture) in Q2 2024 was 93.0 percent, a slight increase from the rate reported in Q1 2024, 92.7 percent.
Adeniran said the rate of informal employment among people living in rural areas was 97.5 per cent while the urban informal employment was estimated at 90 per cent.
He said the time-related underemployment rate which is the share of employed people working less than 40 hours per week and declaring themselves willing and available to do more hours of work in Q2 2024 was 9.2 percent.
This, according to him, indicates a decline compared to the rate recorded in Q1 2024, which was 10.6 per cent.
He said the survey also collected information on the proportion of youths aged (15-24 years) who are not in employment, education, or training (NEET).
The NEET rate for the reference quarter was estimated to be 12.5 per cent, a decrease from 14.4 percent recorded in Q1 of 2024.
The Statistician General of the Federation said the labour force participation rate stood at 79.5 percent in Q2 2024, higher than the participation rate recorded in Q1 2024 (77.3 percent).
He said the participation rate of men in the labour force under the reviewed period stood at 79.9 percent while the women records stood at 79.1 per cent.
According to him, the participation rate was higher in the rural areas with 83.2 per cent, while the urban areas recorded 77.2 percent, indicating that most people were engaged in some form of work either for pay or profit, during the reference period.
Introducing the topic, he said: “Following the review of Nigeria Labour Force Survey methodological processes for conducting Labour Force Statistics in line with international best practices and adaptation of the 19th International Conference of Labour Statisticians (ICLS) recommendation to the Nigeria standard.”
NBS, he said, had been releasing consistently the official labour force statistics for the country since Q4 2022.
He further said this quarter (2nd Quarter of 2024) estimates as presented in the report shows the performance of different labour force indicators that will be useful for informing policy making in the country.
The statement reads in part: “This enhanced methodology using GPS-enabled electronic collection from sampled households across the country allows for better quality responses, field monitoring and analysis of the data. It also allows the production of more policy-relevant indicators than what was produced under the old method using the questionnaire.
“Therefore, it enables the government and other users of the data to design and monitor Labour market policies and programmes within the country.”
…Analysts hinges growth on oil, non-oil segments
Meanwhile, in an intervention, analysts from Afrinvest said: “From a structural perspective, the real GDP growth was jointly driven by sturdy expansion in both the oil and non-oil segments. Precisely, the oil economy expanded for the third consecutive quarter since the pandemic by 5.2 percent y/y, though the momentum trailed first and second quarter pf: 2024 performances of 5.7 percent and 10.2 percent, respectively.
“We note that the average daily crude oil output also improved modestly in the third quarter to 1.47mbpd compared to 1.41mbpd in second quarter. Notwithstanding, the crude oil output level remains significantly short of the 1.78mbpd baseline set in the 2024 budget, and the 13-quarter peak of 1.57mbpd achieved in Q1:2024, said Afrinvest.
“Despite the pickup in growth, from 3.19% in the second quarter and 2.98 per cent in the first, it was still short of the six per cent target set by President Bola Tinubu when he took office last year in Africa’s most populous nation and top oil producer.”
…Tinubu’s reforms
Tinubu’s lightning reform push in the first weeks of his administration sparked hope that he could finally unleash the full potential of Africa’s sluggish economic giant.
But 18 months on, experts said the key planks of his economic overhaul – devaluing the naira and scrapping subsidies – have triggered high cost of living.
According to them, “from a sectoral perspective, the services sector remains the leading driver of the overall economy growth, up 5.2 percent y/y compared to 3.8% in the second quarter of 2024.
Trailing, the industries and agriculture sector growth culminated at 2.2 percent and 1.1 percent sequentially, down from 3.5 percent and 1.4 percent in the second quarter of 2024. We flag that the slowdown in the agricultural sector growth underscores the currently elevated food inflation rate (Oct 2024: 39.2 per cent).
“Likewise, we linked the slowdown in industries sector growth momentum to the reverberating effect of the increase in energy goods prices (PMS price rose from N750.00/litre in the second quarter to N1, 060/litre in the third quarter) and further pressure on the foreign exchange (forex) rate in the quarter – the NAFEM and parallel market rates fell by 2.4 percent and 10.4 percent in the third quarter to N1, 541.94/$ and N1, 680.00/$ respectively.”