Last week, the National Bureau of Statistics (NBS) released Nigeria’s Gross Domestic Product (GDP) report for the third quarter of 2023.
The report showed that the economy grew by 2.54% in real terms, slightly up from the 2.51% recorded in the second quarter of 2023.
When compared with the corresponding quarter of 2022, the current growth rate exceeds the 2.25% recorded in Q3 2022.
Nigeria’s GDP performance in the third quarter of 2023 was mainly propelled by the services sector which grew by 3.99% and contributed 52.70% to the total GDP.
For the third quarter, nominal GDP grew at 16.08% to N60.65 trillion from the N52.25 trillion recorded in the third quarter of 2022.
The non-oil sector exhibited a real growth of 2.75% for the third quarter of 2023, representing a decrease of 1.52% points from the corresponding quarter in 2022 and a decline of 0.84% points from the second quarter of 2023.
In real terms, the non-oil sector represents 94.52% of the nation’s GDP in the third quarter of 2023, surpassing the figure (94.34%) recorded in the third quarter of 2022 but slightly lower than the 94.66% recorded in the second quarter of 2023.
The oil sector accounted for 5.48% of the overall real GDP in Q3 2023, exhibiting a decrease from the corresponding period in 2022 but an increase from the preceding quarter, during which it contributed 5.66% and 5.34%, respectively.
When compared on a quarter-on-quarter basis, the oil sector recorded a growth rate of 12.47% in Q3 2023. Real growth in the oil sector was –0.85% on a year-on-year basis in Q3, this represents an increase of 21.83% compared to the rate recorded in the corresponding quarter of 2022 (-22.67%).
According to the country’s GDP data, here are the top 10 fastest-growing sectors in Nigeria, based on real growth rate by the third quarter of 2023:
Metal Ores – 59.3%
This sector is the fastest growing in the economy. It includes iron ore, gold, copper, and other minerals. The current Minister of Solid Minerals Development, Dr Dele Alake, has regularly been in the news, stressing the investment potential in the mining sector. It seems his efforts are drawing significant investor attention to Nigeria’s rich geological assets.
Financial Institutions – 27.8%
This second-fastest-growing sector includes activities such as banking, insurance, and other financial services. The growth of this sector is driven by increased economic activity and the growing demand for financial services.
This is despite the hawkish stance of the apex bank, which was aimed at mopping excess liquidity in the economy.
Although this sector was hard hit by the cash crunch earlier this year, it is bouncing back with the recent forex policy, which has boosted many banks’ profits.
Water Supply, Sewerage, Waste Management and Remediation – 14.0%
The growth of this sector may be attributed to developmental efforts made by multilateral organisations, such as the World Bank in driving good water supply, sanitation and proper hygiene in the country.
Air Transport – 11.0%
There is no gainsaying the fact that the Nigerian aviation sector is plagued with myriads of challenges, which include: poor infrastructure, obsolete equipment, and difficulties in accessing foreign exchange by operators. Despite the numerous challenges, the sector is still pushing ahead, staying resilient.
The sector’s growth is largely attributed to increased air travel demand in the country. This sector includes activities such as scheduled and chartered air transport services, as well as air cargo transport services.
Telecommunications – 9.7%
Although this sector is faced with a number of regulatory and operational challenges, it has made Nigeria a prime investor’s destination. Nigeria has one of the biggest markets in Africa, and it is not surprising that investors are interested in this market.
Others
Others on the top fastest growing sectors of the economy include:
- Water Transport – 9.2%
- Chemical and Pharmaceutical Products – 6.5%
- Electricity, Gas, Steam and Air Conditioning Supply – 5.3%
- Broadcasting – 5.2%
- Transport Services – 4.5%
