Tinubu Celebrates as Nigeria’s GDP Growth Hits 3.46% in Q3 2024
Services sector leads growth as president sees validation of economic reforms
Nigeria’s economy showed significant improvement in the third quarter of 2024, growing by 3.46% year-on-year according to the latest data from the National Bureau of Statistics (NBS). The growth rate surpassed both the previous quarter’s 3.19% and the 2.54% recorded in the same period last year.
Services Sector Emerges as Key Growth Driver
The services sector emerged as the standout performer, achieving a robust growth rate of 5.19% and contributing 53.58% to the aggregate GDP. This performance underscores the sector’s increasing importance in Nigeria’s economic landscape and marks a significant shift in the country’s economic structure.
The economy’s nominal value reached N71.13 trillion in Q3, representing a substantial 17.26% increase from the N60.66 trillion recorded in the corresponding quarter of 2023. This growth was broad-based, with positive contributions from various sectors of the economy.
Oil Sector Shows Signs of Recovery
The oil sector, historically a crucial component of Nigeria’s economy, showed improvement with a real growth rate of 5.17% year-on-year in Q3 2024. This marks a significant turnaround from the -0.85% contraction recorded in the same quarter of 2023, representing a 6.02 percentage point increase.
Average daily oil production stood at 1.47 million barrels per day (mbpd), showing modest improvements of 0.02 mbpd compared to Q3 2023 and 0.07 mbpd over Q2 2024. This uptick in production volumes has contributed positively to the sector’s performance.
Non-Oil Sector Maintains Steady Growth
The non-oil sector continued its positive trajectory, growing by 3.37% in real terms during Q3 2024. This performance exceeded both the 2.75% recorded in Q3 2023 and the 2.80% growth seen in Q2 2024, demonstrating the increasing diversification of Nigeria’s economy.
Key sectors contributing to the GDP in Q3 2024 included:
- Agriculture: 28.65%
- Information and Communications Technology: 16.35%
- Trade: 14.78%
- Manufacturing: 8.21%
- Crude Oil: 5.57%
- Finance and Insurance: 5.51%
- Real Estate: 5.43%
President Tinubu Claims Victory for Economic Reforms
President Bola Tinubu, through his special adviser Media and Public Communications, Sunday Dare, hailed the GDP growth as validation of his administration’s economic reform agenda. The president emphasized his commitment to achieving a $1 trillion economy by 2030, stating that the country is on track for an economic rebasing exercise in early 2025.
“This performance once again shows that the reforms embarked upon by the Tinubu administration to reposition the economy and ensure better fiscal management are beginning to yield fruits,” the presidential statement noted.
The administration has outlined further economic initiatives, including proposed tax reforms aimed at reducing the burden on small businesses and promoting spatial equity in tax collection. These reforms seek to address the “headquarters effect,” where states hosting company headquarters receive disproportionate tax benefits.
While celebrating the positive economic indicators, President Tinubu acknowledged that more work remains to be done. “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,” he stated.
NACCIMA Questions Growth Figures, Cites Economic Hardships
The Nigerian Association of Chamber of Commerce, Industry, Mines, and Agriculture (NACCIMA) has urged caution in interpreting the GDP growth figures, highlighting a disconnect between statistical improvements and economic realities on the ground. NACCIMA’s National President, Dele Kelvin Oye, pointed to several challenging factors including rising taxation, regulatory barriers, and prohibitive borrowing costs of 35-40% that continue to impact businesses.
The organization questioned the growth narrative, citing persistent issues such as hyperinflation, frequent fuel price hikes, power shortages, and naira devaluation that affect ordinary Nigerians. NACCIMA emphasized that with 56% of Nigerians living in poverty according to World Bank’s 2024 report, statistical growth alone cannot be considered successful without addressing fundamental economic challenges.
“The data does not adequately consider critical factors such as rising taxation by sub-national entities, the implications of the 2024 tax bill, and regulatory barriers stifling local and foreign investments,” Oye said.
