The Nigerian domestic economy recorded significant growth in the fourth quarter of 2024 (Q4 2024), expanding by 3.84 per cent to reach N22.61 trillion.
The Central Bank of Nigeria (CBN) attributed this expansion to the improved performance of the non-oil sector, particularly the financial and insurance subsector.
According to the CBN’s Q4 2024 Economic Report, all real sector economic activities experienced broad-based growth except for the electricity, gas, steam, and air conditioning subsector, which declined by 5.05 per cent.
The downturn in this segment was largely due to increased tariffs, ongoing grid maintenance, and a rising shift towards alternative energy sources.
The oil sector experienced a slower growth rate of 1.48 per cent year-on-year compared to 3.96 per cent in the non-oil sector.
The apex bank noted that this deceleration was primarily attributed to a decline in the price of Nigeria’s Bonny Light crude, which fell to $75.66 per barrel from $82.23 per barrel in Q3 2024.
However, an increase in crude oil production from 1.33 million barrels per day (mbpd) to 1.43 mbpd helped to moderate the slowdown in the sector.
Overall, the oil sector contributed 0.07 percentage points to total GDP growth during the review period.
Non-Oil Sector Drives Economic Expansion
The non-oil sector continued its upward trajectory, expanding at a faster pace of 3.96 per cent compared to 3.37 per cent in Q3 2024.
- This sector contributed 3.77 percentage points to overall economic growth, making it the primary driver of Nigeria’s economic expansion.
“The non-oil sector expanded at a faster pace, growing by 3.96 per cent, relative to 3.37 per cent in the preceding quarter, contributing 3.77 percentage points to total growth,” the apex bank stated in the report.
- Key subsectors that fueled this growth include financial and insurance, information and communication, transportation and storage, crop production, and trade.
- The financial and insurance subsector, in particular, witnessed significant growth due to increased financial technology adoption, improved banking penetration, and higher investment inflows into the capital markets.
Similarly, the information and communication sector benefited from the continued expansion of digital services and increased internet penetration.
Sectoral Performance and Economic Outlook
The transportation and storage sector also played a pivotal role in economic expansion, driven by increased logistics activities, trade facilitation, and government investments in infrastructure projects.
- Additionally, crop production remained robust, supported by favourable weather conditions and sustained agricultural interventions by the government.
- Despite the positive economic trajectory, the electricity and gas subsector’s contraction highlights the ongoing challenges in Nigeria’s energy sector.
- Analysts suggest that addressing infrastructure deficits and enhancing power generation capacity will be crucial in sustaining long-term economic growth.
The CBN projects that continued policy interventions in critical sectors, improved investor confidence, and stability in the exchange rate will support further economic expansion in 2025.
However, external risks such as fluctuations in global crude oil prices and inflationary pressures could pose challenges to growth momentum.
What you should know
The latest GDP figures released by the National Bureau of Statistics (NBS) reveal that Nigeria’s economy grew by 3.84% year-on-year in real terms in the fourth quarter of 2024.
The data shows that the growth was largely driven by the Services sector, which expanded by 5.37% and contributed 57.38% to the country’s total GDP.
