- This is fastest growth rate in three years, says Edun
- Yusuf: economy on track
- Uwaleke: real sector still slow
Experts last night expressed optimism about the economy with the 3.84 per cent year-on-year Gross Domestic Product (GDP) growth.
The government also renewed its commitment to faithfully implementing its economic policies which it credited for this development.
Yesterday, the National Bureau of Statistics (NBS) released the 2024 fourth quarter GDP outcome – 3.84 per cent, compared to the 3.46 per cent of Q4 2023.
Services and petrol refining sectors were the key drivers of the growth, according to the report.
Statistician-General of the Federation, Prince Adeyemi Adeniran, said the growth was 0.38 per cent points higher than the 3.46 per cent of Q4 2023.
Adeniran said: “The Gross Domestic Product (GDP) growth rate in real terms (Constant price) grew by 3.84 per cent in the fourth quarter (Q4) of 2024 on a year-on-year basis, which is 0.38 per cent points higher than the rate recorded in Q4 2023 (3.46 per cent).
“The annual contributions of the economic sector showed that agriculture contributed 24.64 per cent in 2024, which is lower compared to its contributions which stood at 25.18 per cent in 2023.
“Similarly, the industry sector’s annual contribution was 18.47 per cent, which is also lower than the figure recorded for 2023 (18.65%).
“However, the services sector contributions for 2024 were 56.89 per cent, which exceeded the 56.18 per cent recorded for 2023.
“The oil GDP grew by 1.48 per cent in Q4 2024, which showed a decline compared to 12.11 per cent recorded in Q4 2023, and the previous quarter of Q3 2024 which stood at 5.17 per cent.
“The oil sector accounted for 4.60 per cent during the quarter under review.
“The annual oil GDP for 2024 grew by 5.54 per cent, which is 7.75 per cent higher than the annual GDP recorded for 2023 (-2.22 per cent). while the annual contribution of oil stood at 5.51 per cent in 2024 higher than its contribution in Q4 2023 (5.40 per cent).
“The fourth quarter of 2024 recorded an average daily oil production of 1.54 million barrels per day (mbpd), lower than the daily average production of 1.56 mbpd recorded in the same quarter of 2023 by 0.03 mbpd.
“On the contrary, the fourth quarter of 2024 production volume was higher than the third quarter of 2024 (1.47 mbpd) by 0.06 mbpd.
“The non-oil sector contributes 95.40 per cent to the GDP in Q4 of 2024 in real terms.
“This shows an increase on a year-on-year basis when compared to the same period of Q4 2023 which recorded 95.30 per cent.
“Similarly, the quarter under review exceeds the 94.43 per cent recorded in Q3 2024.
“The economic performance of the non-oil sector in Q4 2024 is attributed to the growth recorded in some economic activities, including rail transport & pipelines, metal ores, financial institutions, road transport, quarrying and other minerals, and insurance,
“On an annual basis, the non-oil grew by 3.27 per cent in 2024, which is higher than the rate recorded in 2023 which stood at 3.04 per cent, while in terms of aggregate contributions, the non-oil contributed 94.49 per cent in 2024, which is lower than the 94.60 per cent reported in 2023.”
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, expressed his satisfaction with the report, which indicates that the economy has achieved its fastest growth rate in three years.
In a statement for the ministry, Edun lauded the positive indicators, which he attributed to the effectiveness of President Bola Tinubu’s Renewed Hope Agenda and the resilience of the Nigerian economy.
“We are pleased to see the continued growth momentum, both from a quarterly and annual standpoint.
“The expansion of the services sector and our ongoing efforts to strengthen food security through agricultural investments are yielding positive results,” the minister stated.
He assured of the government’s commitment to ensuring that economic growth translates into tangible improvements in the living standards of all Nigerians.
In pursuit of this goal, the Federal Government is actively implementing various initiatives, including the direct benefit transfer scheme aimed at providing immediate economic relief and support to the vulnerable.
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These efforts are designed to ensure that the benefits of economic growth are equitably distributed across the nation.
Edun reiterated the government’s unwavering commitment to implementing policies and initiatives that foster sustainable and inclusive growth.
According to him, the administration remains focused on creating an environment that promotes economic stability, attracts investment, and generates employment opportunities for Nigerians.
“Efforts to ensure that economic growth translates into improved livelihoods for all Nigerians continue through initiatives such as the direct benefit transfers scheme,” Edun stated.
An economist, Dr. Musa Yusuf, said the GDP growth in the fourth quarter of 2024 reflects the resilience of Nigerian entrepreneurs.
He said: “The GDP report highlights the gradual recovery of the economy and the resilience of the Nigerian private sector.
“It also underscores the need to consolidate on the stability gains in the macroeconomic environment and fix the productivity challenges constraining real sector performance.
“Naira exchange has been relatively stable since then. Inflationary pressures have decelerated marginally and energy prices have declined marginally as well.
“Overall, the outlook for investors’ confidence has been positive over the past few months. These are the explanatory variables driving the modest GDP performance. It is noteworthy as well that the GDP growth for 2024 was 3.40 per cent.
“The agricultural sector recorded a paltry 1.76 per cent growth; manufacturing posted 1.79 per cent, while real estate grew by mere 0.79 per cent.
“Meanwhile financial institutions grew by 27.8 per cent; road transportation 23 per cent; telecommunications 6.8 per cent; and railway 43 per cent. However, aviation and textile sectors remained in recession.”
President of the Association of Capital Market Academics in Nigeria, Prof. Uche Uwaleke, said a cursory glance showed that the economic activities expanded in 2024 than in 2023, reflecting the gradual easing of the impact of the severe economic shocks occasioned by the twin reforms of fuel subsidy removal and exchange rates unification.
He, however, noted that while improvement in crude oil output in the fourth quarter of 2024 compared to the third quarter of 2024 is commendable, it is worrisome that the real sectors of the economy notably agriculture and industry continue to underperform.
Said he: “Given their job creating potentials, a raft of fiscal incentives is required at this time to boost the productive sectors of the economy.”
Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the GDP growth underlined stronger prospects for the economic performance in the period ahead.
“This is a positive development and it’s a sign that the economy is turning the corner from the pains of the reforms by the current administration.
“The main contributor to the increment was the service sector as previously identified.
“Now that we are seeing stability in the foreign exchange market and there is a possibility of lower interest rate on the horizon, we could see stronger contributions to GDP growth by sectors such as the industrials and consumer goods that have been lagging
“I expect that all things being equal, the economy might put in a stronger performance than most analysts expect for 2025. There might be a need for further upward review of economic projections.”
Managing Director, AIICO Capital, Dr Femi Ademola explained that fourth quarter 2024 GDP growth rate of 3.86 per cent made the full year 2024 GDP growth rate to be 3.40 per cent, which is more than the 3.3 per cent projected by the World Bank and 3.1 per cent by the IMF.
“The economic growth is quite laudable. However, in review of the structure of the growth, there are some levels of concerns.
“Growth in agriculture declined to 1.76 per cent from 2.10 per cent in 2023 while the industry sector’s growth fell to 2.00 per cent from 3.86 per cent in 2023. The strong growth of 2024 was from the services sector,” Ademola said.
Managing Director, Buraq Capital Limited, Hassan Usman, said the GDP growth raised hopes on the prospects of the economy.
“This gives hope that we may be turning the corner and the economy is trying to come out of the shocks following the double-barrel reform initiatives.
“The current stable exchange rate and slowing inflation give hope that growth targets for 2025 may be achieved.
“These positive developments should result in improved confidence in the economy, attracting more local and foreign investors and further strengthening the upward trajectory for the economy.”