- Nigeria’s GDP grew by 2.31% in the first quarter of 2023, lower than the previous quarter and the corresponding period of 2022.
- The Services sector drove the GDP growth, growing by 4.35% and contributing 57.29% to the total GDP.
- The oil sector contracted by 4.21% but contributed 6.21% to the GDP, while the non-oil sector grew by 2.77% and contributed 93.79% to the GDP.
Nigeria’s Gross Domestic Product (GDP) grew by 2.31% year-on-year in real terms in the first quarter of 2023, indicating a 1.21% points lower than 3.52% recorded in the previous quarter and 0.8% lower compared to 3.11% recorded in the corresponding period of 2022.
This is according to the recently released Gross Domestic Product report by the National Bureau of Statistics (NBS).
The Statistics Bureau blamed the slowdown in GDP growth rate on the naira scarcity which occurred in the first quarter of the year as the central bank refused to back down on its naira swap policy.
- “The reduction in growth is attributed to the adverse effects of the cash crunch experienced during the quarter.” NBS
The naira swap policy led to s major scarcity of naira notes affecting businesses across the country most of whom rely on cash to transact. The Supreme Court in March, ruled against the policy, ordering the central bank to extend the deadline for the expiry of the old notes to December 31st, 2023.
What the GDP data is saying
The performance of the GDP in the first quarter of 2023 was driven mainly by the Services sector, which recorded a growth of 4.35% and contributed 57.29% to the aggregate GDP.
- The agriculture sector contracted by 0.9%, lower than the growth of 3.16% recorded in the first quarter of 2022.
- Although the growth of the industry sector improved to 0.31% relative to -6.81% recorded in the first quarter of 2022, agriculture, and the industry sectors contributed less to the aggregate GDP in the quarter under review compared to the corresponding period of 2022.
The real growth of the oil sector was –4.21% (year-on-year) in Q1 2023, indicating an increase of 21.83% points relative to the rate recorded in the corresponding quarter of 2022 (-26.04%).
- Growth increased by 9.18% points when compared to Q4 2022 which was –13.38%. On a quarter-on-quarter basis, the oil sector recorded a growth rate of 20.68% in Q1 2023.
- The Oil sector contributed 6.21% to the total real GDP in Q1 2023, down from the figure recorded in the corresponding period of 2022 and up from the preceding quarter, where it contributed 6.63% and 4.34% respectively.
- The country recorded an average daily oil production of 1.51 million barrels per day (mbpd) in Q1 2023, higher than the daily average production of 1.49mbpd recorded in the same quarter of 2022.
However, it was higher than the production volume of Q4 2022 (1.34 mbpd) by 0.17mbpd.
The non-oil sector grew by 2.77% in real terms during the reference quarter (Q1 2023). This rate was lower by 3.30% points compared to the rate recorded in the same quarter of 2022 and 1.67% points lower than the fourth quarter of 2022.
- This sector was driven in the first quarter of 2023 mainly by Information and Communication (Telecommunication); Financial and Insurance (Financial Institutions); Trade; Manufacturing (Food, Beverage & Tobacco); Construction; and Transportation & Storage (Road Transport), accounting for positive GDP growth.
- In real terms, the non-oil sector contributed 93.79% to the nation’s GDP in the first quarter of 2023, higher than the share recorded in the first quarter of 2022 which was 93.37%, and lower than the fourth quarter of 2022 recorded as 95.66%.
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