The latest GDP data released by the National Bureau of Statistics (NBS) has sparked a mix of optimism and skepticism among analysts and stakeholders in Nigeria’s economic landscape.
While some view the reported 3.84% year-on-year GDP growth in Q4 2024 as a positive sign of economic resilience, others question whether it reflects real improvements in living standards and business conditions.
The report indicates that Nigeria’s economy grew by 3.84% in real terms, an improvement from 3.46% recorded in the same period of 2023 and the preceding quarter.
The Services sector emerged as the primary driver of growth, expanding by 5.37% and contributing 57.38% to the country’s GDP.
- Dr. Ango Malari of the Society for Peacebuilding and Economic Advancement highlighted a significant development in the petroleum refining sector, which recorded an impressive 9.6% growth after decades of contraction.
“One good thing about the Q4 GDP report was the recovery of the petroleum refining sector from decades of recession to a positive GDP growth of an impressive 9.6%. This was one of the best performances among the strategic sectors of the economy, attributed to the commencement of refining operations by the Dangote Refinery and the NNPC refineries,” Dr. Malari stated.
- Sam Maiyaki, an economic analyst, noted that the 3.84% GDP growth is a positive sign but emphasized the need for the growth to translate into tangible economic benefits for Nigerians.
“A 3.84% GDP growth is a positive sign, especially as Nigeria navigates economic challenges. The key question is whether this growth translates into real improvements in living standards, job creation, and inflation control,” Maiyaki said
- However, some analysts and social commentators have raised concerns over the figures. Felix Gagare questioned the impact of the GDP growth on Nigerians, stating, “Where’s the GDP? Why aren’t we feeling the impact of the new expanded GDP?
- Similarly, Maurice Ekpenyong criticized the nature of the growth, arguing that it remains non-inclusive.
“It is not an inclusive growth because of the widening gap between the rich and the poor, coupled with the growing level of hunger and human misery in Nigeria since Tinubu came on board as the president,” he tweeted on X (formerly Twitter)
- John Olabamiji also raised skepticism over the reported data, questioning discrepancies between reported growth and actual business performance.
“The economy was driven by the service sector, but the Service PMI entered the contraction zone just last week. I don’t understand this data at all because what I’m experiencing in real life from the service sector does not align with this report,” he said.
- Ikechukwu Kalu pointed out the slow growth in key sectors like manufacturing, agriculture, trade, and construction.
“There are a lot of gaps to be covered on all levels Manufacturing, Agric, trade and construction GDP are all growing but very slowly. We need it like mad to get at least 5% real GDP growth,” Kalu stated.
Concerns Over Credibility of Data
Adding to the debate, Atedo Peterside, founder of Stanbic IBTC Bank Plc, earlier called on the NBS to prioritize trust and credibility in its data collection and reporting.
“The rebasing happens once in a while in most economies. Part of the problem we have here is that there is a trust deficit. The Nigerian Bureau of Statistics said they changed how they compute unemployment, and all of a sudden, we realized that we are almost attaining full employment in Nigeria. Sometimes, it’s garbage in, garbage out,” Peterside warned.
While acknowledging the need for GDP rebasing, he stressed the importance of credibility in economic data.
“I was on the Economic Management Team of Jonathan when the GDP was rebased. But there was credibility then. The head of the NBS had already established credibility. There was no trust deficit. People could at least listen,” Peterside added.
Economic Outlook and Expectations
Investment experts remain cautiously optimistic about Nigeria’s economic trajectory. Onyinyechi Onwubu, Investment Advisor at FCSL Asset Management, expects GDP growth to remain steady.
“We expect increased commercial activities due to the festive period in the latter part of the period to drive the Q4 2024 GDP to hover between 3.5% to 3.6% levels. The average GDP growth rate for 2024 is, however, expected to come in lower than this,” Onwubu noted.
Moyosore Onanuga, Head of Investments at AIICO, projects Q4 GDP growth to be between 2.5% and 3.5%, driven primarily by increased demand during the festive season and a trade surplus. The services sector is expected to continue as the primary driver of economic expansion.
Factors Driving GDP Growth
Nairametrics earlier reported that several factors contributed to the Q4 2024 GDP growth:
- Festive season boost: Increased consumer spending on clothing, food, entertainment, energy consumption, and recreational activities stimulated economic activity.
- Trade surplus: Nigeria recorded a foreign trade surplus of N5.81 trillion in Q3 2024, and a continued positive trade balance in Q4 contributed to GDP growth.
- Strong services sector performance: With over 50% contribution to GDP, the services sector, led by telecommunications, banking, FinTech, and legal services, remained a key driver of growth.
