Analysts have emphasised the need for policies that translate GDP growth into tangible employment opportunities for Nigerians.
Nigeria’s Gross Domestic Product (GDP) grew by 3.46 per cent (year-on-year) in real terms in the third quarter of 2024, latest data from the National Bureau of Statistics (NBS) has shown.
The growth rate is higher than the 2.54 per cent recorded in the third quarter of 2023 and higher than the second quarter of 2024 growth of 3.19 per cent.
This growth was primarily driven by the services sector, which expanded by 5.19 per cent and contributed over half of the GDP.
However, the unemployment rate stood at 4.3 per cent, raising concerns about job creation amid economic expansion.
Unemployment rate rose to 4.3 per cent, showing an increase of 0.1 percentage point in the second quarter of 2024 compared to the same period last year.
Youth unemployment rate was 6.5 per cent in Q2 2024, showing a decrease from 8.4 per cent in Q1 2024.
The report also showed that the unemployment rate among males was 3.4 per cent and 5.1 per cent among females. By place of residence, the unemployment rate was 5.2 per cent in urban areas and 2.8 per cent in rural areas.
According to NBS, the performance of the GDP in the third quarter of 2024 was driven mainly by the services sector, which recorded a growth of 5.19 per cent and contributed 53.58 per cent to the aggregate GDP.
The agriculture sector grew by 1.14 per cent, from the growth of 1.30 per cent recorded in the third quarter of 2023.
The growth of the industry sector was 2.18 per cent, an improvement from 0.46 per cent recorded in the third quarter of 2023.
In terms of share of the GDP, the services sector contributed more to the aggregate GDP in the third quarter of 2024 compared to the corresponding quarter of 2023.
In the quarter under review, aggregate GDP at basic price stood at N71,131,091.07 million in nominal terms. “This performance is higher when compared to the third quarter of 2023 which recorded aggregate GDP of N60,658,600.37 million, indicating a year-on-year nominal growth of 17.26 per cent,” the statistics bureau stated.
The Nigerian economy is classified broadly into the oil and non-oil sectors.
The non-oil sector grew by 3.37 per cent in real terms during the reference quarter (Q3 2024). This rate was higher by 0.62 per cent points compared to the rate recorded in the same quarter of 2023 which was 2.75 per cent and higher than the 2.80 per cent recorded in the second quarter of 2024.
The sector was driven in the third quarter of 2024 mainly by financial and insurance (financial institutions); information and communication (telecommunications); agriculture (Crop production); transportation and storage (road transport); trade; and construction, accounting for positive GDP growth.
In real terms, the non-oil sector contributed 94.43 per cent to the nation’s GDP in the third quarter of 2024, lower than the share recorded in the third quarter of 2023 which was 94.52 per cent and higher than the second quarter of 2024 recorded as 94.30 per cent.
The real growth of the oil sector was 5.17 per cent (year-on-year) in Q3 2024, indicating an increase of 6.02 per cent points relative to the rate recorded in the corresponding quarter of 2023 (-0.85 per cent). Growth decreased by 4.98 per cent points when compared to Q2 2024 which was 10.15 per cent.
On a quarter-on-quarter basis, the oil sector recorded a growth rate of 7.39 per cent in Q3 2024. The Oil sector contributed 5.57 per cent to the total real GDP in Q3 2024, up from the figure recorded in the corresponding period of 2023 and down from the
preceding quarter, where it contributed 5.48 per cent and 5.70 per cent respectively.
The nation in the third quarter of 2024 recorded an average daily oil production of 1.47 million barrels per day (mbpd), higher than the daily average production of 1.45 mbpd recorded in the same quarter of 2023 by 0.02 mbpd and higher than the second quarter of 2024 production volume of 1.41 mbpd by 0.07mbpd.
Reacting to the data, the director/CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf said that “data published by the NBS showed a good development despite all the challenges we are facing in the economy. The country is able to record first a positive GDP growth.”
He explained that “We are able to record a GDP growth in Q3 that is slightly better than what we had in Q2. There was 0.27 percent improvement over the second quarter GDP growth performance but one striking thing about the GDP performance is the dominance of the service sector, which was the main driver of the groups.”
He said “We need to address all the critical structural bottlenecks and macroeconomic bottlenecks that are impeding the performance of the real sector of the economy because it is in the real sector of the economy that you can create more sustainable jobs, generate exports, and a lot more diversified and inclusive economy.”
He pointed out “It is also a bit worrisome that air transportation contracted in Q3, this is also a reflection of the challenges that the aviation sector is facing. Oil refining also contracted. That is not surprising, given the moribund nature of all the refineries up until Q2.
“Maybe by the time we get into Q4, maybe the data will capture the contribution of the Dangote Refinery, and that may change the narrative. The textile sector is still in recession, and the solid mineral sector is also contracting significantly.”
According to Yusuf, “These are sectors that we need to see what we can do from a policy standpoint. Because the whole essence of all of this data is to guide policy makers on the need to recalibrate the policy framework and reforms in a way that will drive a more balanced growth in the economy. So, on the whole, it is a fairly good development, and that the GDP is still positive and it is growing marginally.
“But we need to address the issue of sectoral imbalances to ensure that the real sector of the economy does better, and more importantly, to ensure that there is more alignment between the financial services sector and the rest of the economy.”
He noted that, “What we are seeing now is a complete disconnect between the financial services sector and the real economy, where the financial services sector is growing at over 30 per cent, and the real economy is growing at just about one per cent.”
Similarly, the group executive chairman of Lancelot Group, Adebayo Adeleke noted that the figure from the economic and theoretical framework is at variance with street evidence.
On his part, the national president, Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Dele Kelvin Oye said, unemployment statistics refer to people looking for jobs and not the employed or underemployed.
