The Nigerian economy grew for the seventh consecutive quarter in the second quarter of 2022, with real GDP increasing by 3.54% year on year, an improvement over the previous quarter’s 3.11% growth but lower than the 5.01% growth registered in the same time in 2021.
In terms of aggregate real GDP, it was N17.29 trillion, a quarter-on-quarter decrease from the N17.35 trillion recorded in Q1 2022. Meanwhile, Nigeria’s GDP increased in the third quarter despite global economic challenges.
For example, the United States recorded a 0.9% GDP contraction in Q2 2022, following a 1.6% decline in the previous quarter, an economic condition created by the US Fed’s hawkish stance to restrain the country’s rising cost of goods and services. Remember that the Russia-Ukraine conflict erupted in February and produced a massive increase in global energy costs, further diminishing residents’ purchasing power.
Similarly, the Nigerian Central Bank hiked interest rates twice in two months to offset rising commodity and service prices. However, the inflation rate in July 2022 reached a 17-year high of 19.64% due to the oil, food supply chain, and currency crisis.
Despite these headwinds, some significant industries posted impressive development in the year under review, contributing to the economy’s 3.54% year-on-year growth. In descending order, Naijaonpoint highlights the sectors with the biggest year-on-year growth in Q2 2022.
Road transport – 56.38%
The road transport sector recorded the highest growth rate in the Nigerian economy in Q2 2022 with a 56.38% growth rate, following a 24.63% contraction recorded in the previous quarter. This is the highest quarterly growth rate recorded in the sector since Q2 2021 (92.38%), a figure which was attributed to a favourable base period.
Meanwhile, the road transportation sector only accounts for 1.7% of the aggregate economy and represents the largest sector in the transportation and storage broad sector.
Coal mining – 36.06%
The coal mining sector recorded a 36.06% year-on-year growth in real terms in the review quarter, a significant uptick compared to the decline of 12.97% recorded in the previous quarter. Notably, coal mining is the process of retrieving coal from deep below the Earth’s surface. The sector has an aggregate of N4.79 billion in GDP, accounting for approximately 0.03% of the entire economy.
Water supply and waste management – 23.73%
The Nigerian economy’s water supply, sewage, waste management, and remediation sub-sector expanded by 23.73%, extending its expansionary movement since the pandemic-induced downtrend recorded in Q1 2020.
Compared to the previous quarter, the sector’s growth rate increased 10.51% points from 13.22% recorded in Q1 2022.
Air transport – 22.45%
The aviation sector grew by 22.45% in Q2 2022, from the 50.68% growth recorded in the previous quarter. The sector, which involves domestic and international air travel, has recorded impressive growth recently, owing to the increased demands for air travel.
The increase in the demand for air travelling could be attributed to the pent-up travelling obligations due to the travel restrictions by various countries during the covid-19 pandemic. Similarly, continuous kidnappings in some regions in Nigeria and other security concerns have discouraged many from travelling by land and have opted for air travel. However, the recent sustained hike in ticket fares could reduce the level of activities in the sector.
Quarrying and other minerals – 22.15%
The fifth fastest growing sector in the Nigerian economy in the year’s second quarter is quarrying and other minerals, with a 22.15% growth rate, a reversal from the 13.72% contraction recorded in Q1 2022. It is worth adding that the subsector accounted for 1% of the total gross real GDP.
Others include financial institutions (20.06%), chemical and pharmaceutical products (9.29%), Telecommunications and information services (7.71%), insurance (6.96%), and food, beverage, and tobacco production (5.11%).