- Growth was driven by 4.8% expansion in non-oil sector
- Inflation soared to a near 17-year high of 19.6% in July
Nigeria’s gross domestic product (GDP) grew by 3.54% year-on-year in real terms in the second quarter of 2022, an improvement compared to the 3.11% growth recorded in the previous quarter.
This is according to the latest GDP report released by the National Bureau of Statistics (NBS).
The aggregate real GDP stood at N17.29 trillion in the second quarter of 2022, a marginal decline (-0.37%) when compared to N17.35 trillion recorded in Q1 2022.
The growth recorded in the review quarter also indicates the seventh consecutive quarter of GDP growth in the country, since the recession recorded in Q3 2020.
Major Drivers of the Growth
A cursory look at the data showed that the Agricultural sector accounted for 23.24% of the aggregate GDP, an increase compared to 22.36% recorded in the previous quarter. Also, the industrial sector contributed 19.4%, while services accounted for 57.35% of the GDP.
Meanwhile, the Agricultural sector grew by 1.2% year-on-year, the Services sector expanded by 6.7%, while the Industrial sector contracted by 2.3%, a further decline when compared to the 6.81% decline recorded in the previous quarter.
Non-Oil sector
The non-oil sector grew by 4.77% in real terms during the reference quarter (Q2 2022). This rate was lower by 1.97% points compared to the rate recorded same quarter of 2021 and 1.31% points lower than the first quarter of 2022.
This sector was driven in the second quarter of 2022 mainly by Information and Communication (Telecommunication); Trade; Financial and Insurance (Financial Institutions); Transportation (Road Transport); Agriculture (Crop Production) and Manufacturing (Food, Beverage & Tobacco), accounting for positive GDP growth.
In real terms, the non-oil sector contributed 93.67% to the nation’s GDP in the second quarter of 2022, higher than the share recorded in the second quarter of 2021 which was 92.58% and higher than the first quarter of 2022 recorded as 93.37%.
Oil Sector
The oil sector dipped by 11.77% year-on-year in Q2 2022, compared to a contraction of 26.04% recorded in Q1 2022. The contraction in the sector’s GDP is following the decline in crude oil production capacity.
Specifically, Nigeria recorded an average daily oil production of 1.43 million barrels per day (mbpd), lower than the daily average production of 1.61mbpd recorded in the same quarter of 2021 by 0.18 mbpd and lower than the first quarter 2022 production volume of 1.49 mbpd by 0.06mbpd.
The Oil sector contributed 6.33% to the total real GDP in Q2 2022, down from the figures recorded in the corresponding period of 2021 and the preceding quarter, where it contributed 7.42% and 6.63% respectively.
The Nigerian economy continued on a positive trajectory, growing for the seventh consecutive quarter since the covid-19 induced recession recorded in the third quarter of 2022.
However, despite that the oil sector feeds the country a huge sum of foreign exchange needs, as well as serving as the Nigerian government’s cash cow for revenue, it is not the driver of the GDP growth.
The growth recorded in the past two years is following significant expansionary monetary policies by the CBN, keeping the MPR at 11.5%.
However, due to the rising cost of goods and services, with inflation rate already at a 17-year high of 19.64% in July 2022, the apex bank raised the interest rate to 14% in a bid to curb rising prices.
