In the fourth quarter of 2024 (Q4 2024), the Nigerian domestic economy experienced noteworthy growth, expanding by 3.84% to reach a total value of N22.61 trillion.
Gatekeepers News reports that the Central Bank of Nigeria (CBN) highlighted that this growth was largely driven by the positive performance of the non-oil sector, with particular emphasis on the financial and insurance subsector.
The CBN’s Q4 2024 Economic Report indicated that most real sector economic activities enjoyed broad-based growth, with the exception of the electricity, gas, steam, and air conditioning subsector, which saw a decline of 5.05%.
This downturn was attributed to a combination of increased tariffs, ongoing maintenance of the grid, and a notable shift towards alternative energy sources.
In contrast, the oil sector recorded a more modest growth rate of 1.48% year-on-year, a reduction from the previous quarter’s 3.96% growth in the non-oil sector.
The CBN noted that the slowdown in the oil sector was mainly due to a decrease in the price of Nigeria’s Bonny Light crude, which fell from $82.23 per barrel in Q3 2024 to $75.66 per barrel.
However, an increase in crude oil production from 1.33 million barrels per day (mbpd) to 1.43 mbpd helped to mitigate the overall slowdown in this sector.
During the review period, the oil sector contributed just 0.07 percentage points to total GDP growth. Meanwhile, the non-oil sector continued its upward trajectory, achieving a faster growth rate of 3.96%, compared to 3.37% in the previous quarter.
This sector was the primary contributor to Nigeria’s economic expansion, adding 3.77 percentage points to overall economic growth.
“The non-oil sector expanded at a faster pace, growing by 3.96 per cent, relative to 3.37 per cent in the preceding quarter, contributing 3.77 percentage points to total growth,” the apex bank stated in the report.
Key subsectors that fueled this growth include financial and insurance, information and communication, transportation and storage, crop production, and trade.
The financial and insurance subsector, in particular, witnessed significant growth due to increased financial technology adoption, improved banking penetration, and higher investment inflows into the capital markets.
Similarly, the information and communication sector benefited from the continued expansion of digital services and increased internet penetration.
The transportation and storage sector also played a pivotal role in economic expansion, driven by increased logistics activities, trade facilitation, and government investments in infrastructure projects.
Additionally, crop production remained robust, supported by favourable weather conditions and sustained agricultural interventions by the government.
Despite the positive economic trajectory, the electricity and gas subsector’s contraction highlights the ongoing challenges in Nigeria’s energy sector.
Analysts suggest that addressing infrastructure deficits and enhancing power generation capacity will be crucial in sustaining long-term economic growth.
The CBN projects that continued policy interventions in critical sectors, improved investor confidence, and stability in the exchange rate will support further economic expansion in 2025.
However, external risks such as fluctuations in global crude oil prices and inflationary pressures could pose challenges to growth momentum.
