Nigeria’s economy has achieved its fastest growth in three years, with GDP expanding by 3.84 per cent in the fourth quarter of 2024, surpassing the 3.46 per cent growth rate observed in the corresponding quarter of 2023.
The latest data from the National Bureau of Statistics (NBS) indicates a steady economic expansion, with the services sector driving much of the momentum.
This significant increase is attributed to the robust performance of the services sector, which grew by 5.37 per cent and contributed 57.38 per cent to the aggregate GDP—further solidifying its dominant role in Nigeria’s economy.
The growth surpasses the 3.46 per cent recorded in the previous quarter, marking a notable improvement in economic activity.
The services sector’s strong performance was driven by financial and insurance services and telecommunications, which expanded by 27.78 per cent and 5.90 per cent, respectively. Despite this, the agriculture and industry sectors showed slower growth rates of 1.76 per cent and 2.00 per cent, respectively.
The agriculture sector showed a slower pace of growth, expanding by 1.76 per cent, a decline from the 2.10 per cent recorded in the same period of 2023. The industry sector also saw a downturn, registering a 2.00 per cent growth rate compared to 3.86 per cent in Q4 2023.
On an annual basis, Nigeria’s GDP growth for 2024 stood at 3.40 per cent, marking an improvement from the 2.74 per cent recorded in 2023. In nominal terms, the GDP in Q4 2024 was valued at N78.37 trillion, reflecting an 18.91 per cent increase from N65.91 trillion in the same quarter of the previous year.
Nigeria’s oil sector reported average production of 1.54 million barrels per day (mbpd) in Q4 2024, slightly lower than the 1.56 mbpd recorded in the same quarter of 2023 but an improvement over the 1.47 mbpd reported in Q3 2024.
However, despite this modest increase in output, the real growth of the oil sector declined significantly to 1.48 per cent in Q4 2024, a sharp drop from the 12.11 per cent recorded in the corresponding period of 2023.
On a quarter-on-quarter basis, the oil sector contracted by 7.19 per cent, highlighting volatility in global energy markets and domestic production challenges. The annual growth rate of the oil sector stood at 5.54per cent, a significant rebound from the -2.22 per cent contraction recorded in 2023. The sector contributed 4.60per cent to Nigeria’s total real GDP in Q4 2024, slightly down from 4.70per cent in Q4 2023.
The non-oil sector showed stronger resilience, expanding by 3.96 per cent in real terms in Q4 2024. This growth rate was higher than the 3.07 per cent recorded in the same quarter of 2023 and an improvement over the 3.37 per cent seen in Q3 2024. The sector’s expansion was primarily driven by financial and insurance institutions, as well as the telecommunications industry.
In total, the non-oil sector contributed 95.40 per cent to Nigeria’s GDP in Q4 2024, surpassing the 95.30 per cent recorded in Q4 2023. However, on an annual basis, the sector’s overall contribution in 2024 stood at 94.49 per cent, slightly lower than the 94.60 per cent reported in 2023.
Some experts believe the latest GDP figures reflect an economy gradually strengthening, with the services and non-oil sectors playing a pivotal role in sustaining growth.
However, challenges remain, particularly in the oil sector, where fluctuations in production and global market dynamics continue to impact overall performance.
With an upward trend in GDP growth and a resilient non-oil sector, economic diversification efforts appear to be yielding positive results. Policymakers may need to focus on sustaining this momentum by addressing structural bottlenecks and fostering an environment conducive to investment and job creation.
Nigeria’s economic growth is expected to continue, with the World Bank projecting a 3.5 per cent increase in 2025, supported by a decline in inflation and robust services sector activity. However, challenges such as inflationary pressures and fiscal sustainability remain significant concerns for the country’s economic stability.
