Nigeria’s Gross Domestic Product (GDP) grew by 2.25% (year-on-year) in real terms in the third quarter of 2022.
In its Gross Domestic Product Q3 2022 report, the National Bureau of Statistics (NBS) stated that growth rate declined from 4.03% in the third quarter of 2021.
According to NBS, reduction in growth is attributable to the base effects of the recession and the challenging economic conditions that have impeded productive activities.
The Q3 2022 growth rate decreased by 1.78% points from the 4.03% growth rate recorded in Q3 2021 and decreased by 1.29% points relative to 3.54% in Q2 2022.
However, quarter-on-quarter, real GDP grew at 9.68% in Q3 2022, reflecting a higher economic activity in Q3 2022 than the preceding quarter. In the quarter under review, aggregate GDP stood at N52,255,809.62 million in nominal terms.
This performance is higher when compared to the third quarter of 2021 which recorded aggregate GDP of N45,113,448.06 million, indicating a year-on-year nominal growth rate of 15.83%. The nominal GDP growth rate in Q3 2022 was higher relative to the 15.41% growth recorded in the third quarter of 2021 and higher compared to the 15.03% growth recorded in the preceding quarter.
In a chat with Blueprint, Professor of the Capital Market at Nasarawa State University, Uche Uwaleke, noted that Q3 real GDP performance further underscores the increasing importance of the non oil sector.
He said that despite a slump in oil sector performance due chiefly to the reduction in oil production to just 1.2 million barrels per day, the economy was still able to expand by 2.25% in the third quarter driven by the non oil sector which contributed over 94% to GDP.
He said: “Another remarkable development is that there was an improvement in the agric sector relative to the previous quarter in spite of the flooding and insecurity in many parts of the country which goes to show that Agriculture remains one of the resilient sectors of our economy.
“It’s equally pertinent to note that, within the non oil sector, the positive real GDP growth rate recorded in the third quarter was powered mainly from the services sector especially Financial Services, ICT and Transportation as opposed to Industry and Agriculture where most of the jobs are.
“The manufacturing sector, for example, covering 13 activities recorded negative real GDP growth rate. The same with electricity and gas. The dismal performance of the manufacturing sector reflects the disconnect between the Financial services sector and the real sector. It also indicates that the monetary policy tightening stance of the CBN in July and September of 2022 and the resultant high lending rates, may have had adverse impact on the manufacturing sector coupled with forex crisis and high energy costs.
“The impact of the prolonged ASUU strike equally reflected in the Education sector’s real GDP which dropped compared to the corresponding period in 2021.
“These factors, including the base effect, will likely result in a lower GDP growth rate in the last quarter of this year.
“I think real GDP growth rate can be improved if the challenge of oil theft and pipelines vandalism is tackled against the backdrop of favourable crude oil price.
“Also, in view of the negative impact of monetary policy tightening on economic growth, the CBN is advised to halt further hikes in the Monetary Policy Rate while using it’s open Market Operations and non traditional measures including the effective implementation of the currency redesign and eNaira to control money supply.
