Nigerian Economy Beats Estimates, Grows By 3.5% In Q2

Economic growth in Nigeria, accelerated faster than expected in the second quarter, driven by growth in the non-oil sector.

Latest report from the National Bureau of Statistics (NBS), showed that Nigeria’s Gross Domestic Product (GDP) grew by 3.54 per cent in the second quarter of 2022, compared to 3.1 per cent in the first quarter, the National Bureau of Statistics (NBS) said in a report yesterday.

However, the growth rate declined from 5.01 per cent in the second quarter of 2021 when rapid growth was recorded following the toll the COVID-19 pandemic exacted on the economy in Q2 2020.

The government owned statistics bureau said “the recent rising prices have adversely impacted on the second quarter 2022 performance.” Nigeria’s inflation rate reached a 17-year high of 18.6 per cent in July this, according to official figures.

The Q2 2022 growth rate decreased by 1.47 per cent points from 5.01 percent growth rate recorded in Q2 2021 and increased by 0.44 per cent points relative to 3.11 per cent in Q1 2022.

Quarter-on-quarter, real GDP grew at -0.37 per cent in Q2 2022, reflecting lower economic activity in Q2 2022 than in the preceding quarter.

The government has merely paid lips service to fighting insecurity which has gravely affected the food supply chain, aside the global effect of Russia/Ukraine war. Over 1,743 Nigerians were killed across Nigeria in the first three weeks of 2022. Over 80 percent of the killings were carried out by the various terror groups operating the North-West and Central zones of the country.

Dark Clouds Over The Economy

In the second quarter, aggregate GDP stood at N45,004,520.89 trillion in nominal terms. This performance is higher when compared to the second quarter of 2021 which recorded aggregate GDP of N39,123,713.32 trillion, indicating a year-on-year nominal growth rate of 15.03 per cent.

Based on the NBS data that was released yesterday, nominal GDP growth rate in Q2 2022 was higher relative to the 14.99 per cent growth recorded in the second quarter of 2021 and higher compared to the 13.25 percen growth recorded in the preceding quarter. For better clarity, the Nigerian economy has been classified broadly into the oil and nonoil sectors.

The non-oil sector grew by 4.77 per cent in real terms during the reference quarter (Q2 2022). This rate was lower by 1.97 per cent points compared to the rate recorded same quarter of 2021 and 1.31 per cent points lower than the first quarter of 2022.

The non-oil sector growth 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.

On the other hand, the real GDP growth of the oil sector was –11.77 percent (year-on-year) in Q2 2022 indicating an increase of 0.89 percent points relative to the rate recorded in the corresponding quarter of 2021. Growth increased by 14.27 percent points when compared to Q1 2022 which was –26.04 per cent. Quarter-on-quarter, the oil sector recorded a growth rate of -4.97 per cent in Q2 2022. The oil sector contributed 6.33 percent 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 per cent and 6.63 per cent respectively.