Nigeria’s Gross Domestic Product (GDP) recorded a growth of 2.74% for the full year 2023, according to the latest report by the National Bureau of Statistics.
This pace, however, trails the 3.10% expansion seen in the previous year, marking the mildest growth rate since the 2020 economic shrinkage, which stood at –1.92% in the wake of the global health crisis.
Zooming into the quarterly performance, the fourth quarter of 2023 witnessed the economy expanding by 3.46% on a year-on-year basis.
This figure is a notch lower than the 3.52% growth rate recorded in the corresponding quarter of 2022, but it does represent a rebound from the third quarter’s growth of 2.54% in 2023.
Taking the spotlight in Q4 2023 was the Services sector, which not only climbed by 3.98% but also made a substantial contribution to the overall GDP, accounting for more than half at 56.55%.
In an economic landscape that is as dynamic as it is challenging, Nigeria has seen remarkable growth in various sectors throughout 2023. As we navigate the data, the sectors present a fascinating narrative of resilience and progress.
Here, we list the fastest-growing sectors in ascending order, showcasing where the nation’s economic pulse is beating the strongest.
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#10 Electricity, Gas, Steam and Air Conditioning Supply
The Electricity, Gas, Steam, and Air Conditioning Supply sector has seen a growth rate of 5.56% in 2023, marking a recovery from a contraction of 2.21% in the previous year. This sector’s rebound is crucial for powering homes and industries, signifying a spark in economic activities.
Despite the growth, this sector faces challenges such as inconsistent power supply, infrastructural deficits, vandalism, and equipment theft. These issues undermine the sector’s efficiency and ability to provide uninterrupted services.
#9 Chemical and Pharmaceutical Products
The Chemical and Pharmaceutical Products sector has shown a healthy growth of 6.40%. In 2022, this sector had a higher growth rate of 9.44%, indicating a slight deceleration, yet it remains a vital component of the economy with its steady expansion.
The sector grapples with the influx of substandard and counterfeit drugs, limited research and development, and competition from cheaper imports. Regulatory challenges and the high cost of local production also pose significant barriers.
#8 Air Transport
Air Transport has taken off with a 7.38% growth rate despite facing turbulence, a significant drop from the previous year’s high of 26.23%. This indicates a normalisation following a period of extraordinary growth, yet it remains a strong contributor to the economy.
Air transport in Nigeria contends with infrastructural shortcomings, regulatory inconsistencies, and safety concerns. High operating costs and foreign exchange volatility also present substantial challenges to airlines operating within the country.
#7 Information and Communication
The Information and Communication sector has witnessed a growth rate of 7.91%. This sector, which was growing at 9.76% in the prior year, continues to show its importance in the digital age, connecting people and businesses alike.
Challenges here include cybersecurity threats, inadequate broadband infrastructure in rural areas, and a digital divide that limits the reach of ICT benefits. Policy inconsistency and regulatory bottlenecks also impede the sector’s full potential.
#6 Water Transport
Navigating through economic currents, Water Transport has posted an 8.38% growth rate. This marks a decrease from 14.11% in 2022 but still highlights the sector’s role in facilitating trade and the movement of goods.
This sector faces issues such as piracy and maritime insecurity, inefficient port operations, and dredging challenges. Poor inland waterway navigation and environmental concerns also affect its growth prospects.
#5 Telecommunications & Information Services
The Telecommunications & Information Services sector has dialled a growth rate of 8.90%, slightly lower than the 10.72% in the previous year. This sector’s growth indicates the increasing reliance on digital connectivity and data services.
Telecommunications companies in Nigeria often struggle with right-of-way restrictions, vandalism of telecom infrastructure, and multiple taxations. There is also the challenge of maintaining quality of service amidst rapidly increasing user demands.
#4 Water Supply, Sewerage, Waste Management and Remediation
Clean water and efficient waste management are essential, and this sector’s growth of 12.65% reflects that. Though a slight decrease from 13.62% in 2022, it underscores the ongoing efforts in improving public health and sanitation.
Challenges include inadequate funding for infrastructure, poor maintenance of existing facilities, and the prevalence of open defecation. There’s also the issue of managing industrial waste and the health hazards posed by improper waste disposal.
#3 Financial and Insurance
The Financial and Insurance sector has shown a robust growth rate of 26.53%, a substantial increase from 16.36% in 2022. This growth reflects the sector’s resilience and pivotal role in financial stability and risk management.
The sector is challenged by a low level of insurance penetration, the prevalence of a large informal economy, and consumer trust issues. Financial institutions also face risks associated with non-performing loans and regulatory compliance costs.
#2 Financial Institutions
With an impressive growth rate of 28.86%, Financial Institutions have outpaced their previous year’s growth of 17.24%. This sector is crucial in mobilising financial resources and supporting the expansion of other sectors.
Financial Institutions deal with challenges like cybercrime, regulatory pressures, and maintaining profitability in the face of a cash-dominated economy. The need for financial literacy and inclusion remains a significant hurdle as well.
#1 Metal Ores
Topping the chart is the metal ore sector, with a staggering growth rate of 50.32%, significantly up from 15.98% in 2022.
This sector’s explosive growth highlights its immense contribution to Nigeria’s economy, driven by global demand and investment in the mining sector.
In the Metal Ores sector, issues include illegal mining activities, environmental degradation, infrastructure deficits, and security concerns in mining areas. There is also the challenge of navigating the complex regulatory and policy environment.
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