Despite the hardship occasioned by fuel subsidy removal in June, the service sector has pushed Nigeria’s Gross Domestic Product to grow marginally in the third quarter of 2023 by 2.25 per cent.
According to the National Bureau of Statistics’ latest data, Nigeria’s GDP rose by 2.54 per cent (year-on-year) in real terms in Q3 from 2.51 per cent in Q2 and 2.25 per cent in the same period last year.
NBS said the agriculture sector grew by 1.30 per cent, from the growth of 1.34 per cent recorded in the third quarter of 2022 and that the industry sector’s growth was 0.46 per cent, an improvement from -8.00 per cent recorded in Q3 of 2022.
“In terms of share of the GDP, agriculture and the industry sectors contributed less to the aggregate GDP in Q3 compared to the third quarter of 2022,” it said.
An analysis of the NBS report showed that the ICT sector slowed to 6.69 per cent in Q3 from 8.60 per cent in the previous quarter. The manufacturing sector grew by 0.48 per cent, down from 2.20 per cent, while trade’s growth was 0.89 percentage points lower than the 2.41 per cent recorded in Q1.
Reacting to the development, Dr Muda Yusuf, chief executive officer of the Centre for Promotion of Private Enterprise, attributed the slow growth in critical sectors of the economy to high energy costs and the Foreign exchange crisis.
“The high energy cost and FX exposure has led to profound shocks in critical sectors of the economy. The reforms are hitting virtually everybody,” Yusuf said.
Recall that in October, the International Monetary Fund downgraded Nigeria’s economic growth forecast by 0.3 per cent points to 2.9 per cent for 2023.
The Washington-based lender projected that the country’s economy would decline from 3.3 per cent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with adverse effects of high inflation on consumption taking hold.
In June, President Bola Ahmed Tinubu introduced a fuel subsidy removal policy, which increased fuel pump prices from N189 per litre to over N617 per litre.
