President Bola Tinubu has expressed excitement over the third quarter (Q3) Gross Domestic Product (GDP) report released on Monday by the National Bureau of Statistics (NBS), assuring Nigerians of better economic output as the economy continues to expand.
According to the NBS, Nigeria’s GDP grew by 3.46 percent, compared to the 3.19 percent growth recorded in the second quarter.
The top contributing sectors to GDP in Q3 2024 were Agriculture (28.65 percent), ICT (16.35 percent), Trade (14.78 percent), Manufacturing (8.21 percent), Crude Oil (5.57 percent), Finance and insurance (5.51 percent), and Real Estate (5.43 percent).
Year-on-year, the economy grew by 0.92 per cent higher than the 2.54 percent recorded in Q3 2023.
According to the GDP Q3 2024 Report, released by the statistical agency, real GDP stood at N20.12 trillion compared to N18.29 trillion in Q2 2024 and N19.44 trillion in Q3 2023.
The economy was driven by the non-oil sector which accounted for 94.43 per cent while the oil sector contributed 5.57 per cent in the period under review.
The growth in GDP, according to a statement issued on Monday by the media and public communication adviser to the President, Sunday Dare, showed 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.
An elated Tinubu stated, “I am excited by the latest report from the NBS 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 president stressed that the 3.46 percent growth indicated that Nigeria was recovering from his reforms’ unintended effects.
The President said his administration has not and will never forget his promise of a $1 trillion economy by 2030. He assured that once the economy was 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.
According to the statement, the performance once again showed 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 indicated 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.
Furthermore, the NBS report showed that non-oil contribution decreased on a year-on-year basis compared to the 94.52 percent recorded in Q3 2023 but higher than 94.30 percent recorded last quarter.
The NBS attributed the slight increase in GDP growth rate to an increase in production level within the review quarter compared to Q2.
In nominal terms, aggregate GDP at its current price, stood at N71.13 trillion, a year-on-year, representing a nominal growth of 17.26 percent compared to N60.66 trillion in Q3 2023.
Aggregate GDP was also higher than N60.93 trillion recorded in Q2 2024.
The non-oil sector performance was further attributed to growth in economic activities, particularly crop production, trade, telecommunication, and real estate.
The sector grew by 3.37 percent in real terms compared to 2.80 percent in Q2.
On the other hand, the oil sector recorded an average daily oil production of 1.47 million barrels per day (mbpd) in the review quarter compared to 1.41 mbpd in the preceding quarter and 1.45 mbpd in Q3 2023.
The oil economy recorded real growth of 5.17 percent year-on-year in Q3, indicating a decrease of 4.98 percent compared to 10.15 percent in Q2.
Agriculture contributed 28.65 percent to GDP in real terms in Q3 compared to 22.61 percent in the preceding quarter, and 29.31 percent in Q3 2023.
However, the sector’s growth declined by 1.14 percent, year-on-year in real terms, compared to 1.41 percent in the preceding quarter.
The manufacturing sector contributed 14.30 percent to GDP in Q3 compared to 12.68 percent in Q2 and 16.18 percent in Q3 2023.
The sector grew by 3.62 percent, year-on-year, compared to 1.91 percent in Q2, and a decline of 32.97 percent compared to 36.59 percent in Q3 2023.
Also, the construction sector contributed 7.49 percent compared to 8.45 percent in the preceding quarter and 8.43 percent in Q3 2023. The sector grew by 2.91 percent, year-on-year.
Also, in Q3, trade contributed 12.67 percent to GDP compared to 15.95 percent in Q2 and 11.06 percent in Q3 2023. The sector grew by 0.65 percent year on year compared to 0.70 percent in the preceding quarter.
Finance and insurance subsector contributed 4.72 percent to growth in Q3 compared to 6.39 percent in Q2 and 3.17 percent in the corresponding quarter of 2023.
According to the Nigeria Labour Force Survey (NLFS) Q2 2024 Report, also released by the NBS, the labour force participation rate among the working-age population increased to 79.5 percent in Q2 from 77.3 percent in Q1.
Employment-to-population ratio was 76.1 per cent, an increase of 2.9 per cent compared to 73.2 per cent in Q1.
The combined unemployment rate and time-related underemployment as a share of the labour force population (LU2) decreased to 13 percent in Q2 2024 from 15.3 percent in Q1 2023.
Moreover, informal employment remained high at 93 percent.
The NBS noted that the unemployment rate among youth aged (15-24 years) was 6.5 percent in Q2.
Unemployment in urban areas stood at 5.2 percent, significantly higher compared to 2.8 percent in rural areas.
The report added that time-related underemployment in Q2 dropped to 9.2 percent from 10.6 percent in Q1.
It stated that 3.7 percent of the working-age population was in subsistence agriculture, adding that the percentage of youth Not in Education, Employment, or Training (NEET Rate) stood at 12.5 percent.
The report further pointed out that the rate of informal employment among people living in rural areas was 97.5 percent, while the urban informal employment rate was estimated at 90 percent.
Also, underemployment rate, the share of employed people working less than 40 hours per week and declaring themselves willing and available to do more hours of work, stood at 9.2 per cent.
This indicated a decline compared to 10.6 per cent in the preceding quarter, the NBS added.
However, reacting to the economic performance, a financial expert, Prof. Uche Uwaleke, lamented that the present economic headwinds occasioned by high interest and exchange rates were hurting the manufacturing sector the most as evidenced by the downward trend in performance since the first quarter (Q1) 2024.
In a position paper sent to THISDAY, Uwaleke, a former Commissioner for Finance in Imo State and currently, the Director, Institute of Capital Market Studies, Nasarawa State University, observed that there has been steady improvement in real GDP growth since Q1 2024 powered by growth in the non- oil sector.
Uwaleke noted that oil sector performance declined in Q3 compared to Q2 despite slight improvement in crude oil production suggestive of lower crude oil prices during Q3, adding that average crude oil output over the three quarters was below 1.5mbpd.
“The present economic headwinds occasioned by high interest and exchange rates are hurting the manufacturing sector the most as evidenced by the downward trend in performance since Q1 2024
“The transport sector recorded significant improvement over the previous quarter although its contribution to GDP appears insignificant at less than one per cent.
“The financial sector grew by over 30 percent. Given weak growth rates of the Agric and manufacturing sectors, this is one evidence that the financial sector is disconnected from the productive sectors of the economy
“In my view, this identified growth pattern, weighted in favour of the services sector, is not healthy for a developing economy such as ours. Little wonder, economic growth does not appear inclusive reflecting in rising unemployment and poverty levels.
“It is time we reset this faulty economic structure, leveraging technology, in favour of the productive sectors: Industry and Agriculture.
“Indeed, structural change is strongly recommended by UNCTAD as one of the ingredients of building productive capacities,” he added
