Fastest growing sectors in Nigeria’s economy in 2022

Earlier this week, the National Bureau of Statistics (NBS) released Nigeria’s Gross Domestic Product (GDP) report for 2022. The report showed that the economy grew by 3.1% year-on-year in real terms, a slow growth compared to 3.4% recorded in the previous year.

According to the report, the non-oil sector accounted for 94.33% of the aggregate GDP while the oil sector represented 5.64% of the economy. In aggregate terms, the real GDP stood at N74.64 trillion in the review year, in contrast to the N72.39 trillion recorded in 2021.

The Nigerian economy expanded by 3.1% in the year under review, despite inflationary pressure and aggressive monetary policy hikes. Recall that Nigeria’s annual inflation rate averaged at 18.85% in 2022 from 16.95% recorded in the previous year, the highest in 21 years, leading to multiple rate increases by the apex bank.

Further analysis of the data showed that the growth was largely driven by the non-oil sector, with increased activities in the financial, transportation, waste management, ICT, trade, and construction sector, representing the fastest-growing sectors in the economy for 2022.

As usual, Nairametrics present the fastest-growing sectors in the Nigerian economy in 2022, with reference to their performance in the preceding year.

5th: Trade – 5.13%

The trade sector grew by 5.13% year over year in 2022, representing a slow growth when compared to 8.62% recorded in the previous year. However, the sector maintained the fifth fastest sector, the same as recorded in the previous year.

• Trading activities in the country have improved in the last two years, overturning the contractions recorded between 2016 and 2020. The signing of the African Continental Free Tade Agreement (AfCFTA) in July 2019, has also presented an opportunity for growth in Nigeria’s trade with other African economies.
• The resumption from the covid-19 pandemic and lockdown has also supported the growth level recorded in the Nigerian trade sector.

4th: Information and communication – 9.76%

The information and communication sector was the fourth fastest-growing sector in the year under review. The sector grew by 9.76% in 2022, an improvement compared to the 6.55% recorded in 2021.

• The sector moved from the 6th position recorded last year to the fourth position in the review year. The ICT sector comprises four subsectors; telecommunication, publishing, motion pictures, and broadcasting.
• The telecommunications and information services subsector which includes some of the largest companies in Nigeria, grew by 10.72% year over year, an improvement from 7.28% recorded in the previous year.
• The publishing and motion pictures subsectors grew by 5.59% and 5.82% respectively, while the broadcasting subsector grew by 5.37%.

3rd: Water and waste management – 13.62%

The waste management sector, which involves water supply, sewage, waste management and sewage, grew by 13.6% in 2022, representing the third fastest-growing sector in the year.

• Compared to the previous year, the sector slowed down in terms of growth rate from 18.3%.
• The water and waste management sector lost its second position from the previous year to the transportation and storage sector.

2nd: Transportation and Storage – 15.2%

With a growth rate of 15.2% in 2022, the transportation and storage sector of the Nigerian economy stood as the second fastest sector for the year.

• Meanwhile, the growth slowed relative to the previous year, where it printed annual real growth of 16.3%. The transportation and storage sector comprises of road, rail, water, air transport, and other transport-related services.
• Air transport recorded the highest growth rate in the review year at 26.23%, followed by road transport with 15.14%.
• Likewise, the transport services subsector recorded a growth rate of 5.55% in 2022. The water transport subsector grew by 14.11% year-on-year in the review year.

1st: Financial and Insurance – 16.36%

The financial and insurance sector was the fastest growing sector in the Nigerian economy in 2022 with real growth of 16.4%, an increase compared to 10.1% recorded in the previous year.

• The sector improved from fourth position last year to stand top of the list in the review year. The broad sector comprises financial institutions and insurance subsectors.
• The financial institution’s subsector recorded a positive growth rate of 17.24% in the year under review, compared to the 10.53% reported in the previous year.
• Likewise, the insurance sector recorded an 8.68% year-on-year growth, outpacing the 6.24% captured in the previous year.

Others include

• 6th: Construction – 4.54%
• 7th: Art, entertainment, and recreation – 4.29%
• 8th: Accommodation and food services – 4.22%
• 9th: Human health and social service – 4.20%
• 10th: Real estate – 3.95%