Nigeria’s transportation and financial sectors, which registered real growth rates of 41.59% and 12.7%, respectively, were at the top of the list of the fastest-growing sectors in the third quarter of 2022.
This is stated in the National Bureau of Statistics’ Q3 2022 Gross Domestic Product (GDP) report (NBS).
In Q3 2022, the Nigerian economy grew by 2.25% in real terms year over year, largely as a result of progress in the non-oil sector. However, due to regional and global limitations, growth was slower than it had been the previous quarter (3.54%).
While four of the nineteen sectors showed contractions, fifteen of them showed positive year-over-year growth in broad sectoral disaggregation. Manufacturing (1.91%), other services (2.67%), electricity (3.56%), and mining and quarrying (21.31%) were the sectors with negative growth during the time period.
Sectors in recession:
In the event that the total GDP declines for two consecutive quarters, an economy is said to be in a recession. In the broad sectoral classification, only two sectors are still in recession. As follows:
The supply of electricity, gas, steam, and air conditioning saw a 3.56% decline in GDP, following declines of 11.48% in Q2 2022 and 11.2% in Q1 2022. Despite recording impressive growth rates the year prior, the sector has maintained negative growth over the last three quarters.
After experiencing an 11.09% contraction the previous quarter, the mining and quarrying sector experienced a 21.31% contraction in the quarter under review. The performance of the crude oil and natural gas sectors has been a major factor in the sector’s downward trend since Q2 2020.
The Nigerian oil industry has been plagued by the erratic nature of the world crude oil market as well as its inability to operate at full capacity due to, among other things, oil theft, vandalism, insecurity, and investment flight.
The oil refining sector was one of the subsectors that printed a decline in Q3 2022 of 44.7% after a decline of 42.12% in Q2 2022. Rail transportation, pipeline, textile, apparel and footwear, and these industries all experienced negative GDP growth for at least two consecutive quarters.
The Nigerian economy’s fastest-growing sectors for Q3 2022 are listed below:
Transport and storage (41.59%): The Nigerian economy’s transportation and storage sector grew by 41.59% in the third quarter of 2022, making it the fastest-growing sector in the continent’s largest economy. However, because of the decline in the pipeline and rail transportation subsectors, it expanded more slowly than it did the previous quarter.
According to the breakdown, road transport, which makes up 83.6% of the entire sector, grew by 49.68% year over year, which is slower than the 56.38% observed in Q2 2022 but higher than the 21.11% observed in the same period of 2021.
Compared to Q2 2022, when the water transport subsector grew by 3.02%, it grew by 19.48% in Q3 2022.
Air travel increased by 14.58%, while transportation services grew by 6.66% and post and courier services increased by 5.36% year over year in real terms.
Finance and insurance (12.7%):
The third quarter of the year saw the financial and insurance sector grow by 12.7% year over year in real terms, which was a slower rate than the 18.48% growth seen in the second quarter and the 23.24% growth seen in Q1 2022.
With an estimated quarterly revenue of N660.8 billion and an estimated total annual revenue of N2.9 trillion, the sector represents 3.49% of the national economy.
Approximately 90% of the sector is made up of the financial subsector, which increased by 12.03% year over year from the 20.06% recorded in the previous quarter.
On the other hand, the insurance subsector saw growth of 19.09% year over year, outpacing the 6.96% seen in the prior quarter.
Information and communication (10.53%): ICT sector growth improved to 10.53% year-over-year growth in Q3 2022 from 6.55% in the previous quarter. 15.4% of the country’s GDP is generated by the information and communication sector.
The telecommunications sector, which includes some of the biggest companies in the nation and makes up 83.7% of the ICT sector, increased by 10.53% year over year from 6.55% in the previous quarter.
Compared to the 3.43% growth seen in Q2 2022, the Publishing subsector posted a 12.06% growth in the quarter under review. While broadcasting posted a 6.58% year-over-year growth, the film, sound recording, and music industries all saw 22.41% growth.
Others include
- Art, entertainment, and recreation – 7.79%
- Accommodation and food services – 6.77%
- Construction – 5.52%
- Trade – 5.08%
- Human health and social services – 4.58%
- Real estate – 4.56%
- Administrative and support services
What You Should Know:
In the third quarter of 2022, Nigeria’s gross domestic product (GDP) expanded by 2.25% year over year in real terms, which was a decline from the 3.54% growth seen in the previous quarter.
Agriculture increased from 23.24% in Q2 to 29.67% in real terms of Nigeria’s total GDP. Services made up 51.96 percent of the economy, while the industrial sector made up 18.37%.
In Q3, the oil sector’s contribution to the real aggregate GDP decreased from the previous quarter’s 6.33% to 5.66%.
The non-oil sectors experienced an annual growth rate of 4.27%, which was 1.13% points lower than the corresponding period in 2021 and 0.50% points lower than Q2 2022. Despite this, it increased by 0.67% and 1.83%, respectively, quarter over quarter and year over year, in terms of its share of contribution to real aggregate GDP.