CBN claims Nigeria’s economy witnesses growth in Q3 2024

According to the Central Bank of Nigeria (CBN), the economy grew by 3.46 percent in Q3 2024, with output reaching ₦20.115 trillion, up from 3.19 percent (₦18.285 trillion) in Q2 2024, driven mainly by the non-oil sector.

According to the study, the tight monetary policy stance and the decline in the food component of the Consumer Price Index basket caused inflation to moderate during the quarter.

This was disclosed in the recently published Economic Report for the third quarter of 2024 by the Central Bank of Nigeria.

Increased security around oil pipeline infrastructure in the Niger Delta region led to an increase in domestic crude oil production.

The growth of 3.46 percent recorded in Q32024 represented the third consecutive expansion year-to-date, surpassing the 3.19 percent and 2.54 percent recorded in Q22024 and the corresponding quarter of 2023, respectively.

Growth was on account of continued efforts to improve the business environment, streamline cumbersome business processes, and deepen the quality of business infrastructure.

The 24-month window period opened for the banking sector recapitalization (according to their license category and authorization) supported the robust growth in the services sector, particularly, the finance and insurance sub-sector, the report explained.

The continued drive of the government to improve crude oil production to a target of 2 million barrels per day by year-end of 2024 helped the oil sector to maintain positive growth for the fourth consecutive quarter.

Thus, the oil sector grew by 5.17 percent (year-on-year) in Q32024, compared with a growth of 10.15 percent in the preceding quarter, and contributed 0.28 percentage points to the overall increase in the period under review.

The performance was slower than the preceding quarter, owing to a drop in prices of Nigeria’s Bonny Light crude in the international market, to US$82.07/b from US$86.92/b in Q2 2024.

However, with the increase in crude oil production from 1.27 mbpd in Q2 2024 to 1.33 mbpd in Q3 2024, the sector maintained a positive contribution to overall growth.

The non-oil sector growth accelerated to 3.37 percent in Q3 2024 compared with a growth rate of 2.80 percent in the preceding quarter, contributing 3.18 percentage points to total growth. The expansion of the non-oil sector was driven by the performance of the financial & insurance, information & communication, crop production, trade, transportation & storage, and real estate sub-sectors.

In terms of sectoral performance, CBN said all the sectors (agriculture, industry, and services) grew in Q3 2024.

The services sector expanded at the fastest pace of 5.19 percent in Q32024, compared with 3.79 percent in Q22024 and 3.99 percent in Q32023, remaining the most dominant sector and accounting for 53.58 percent of aggregate Gross Domestic Product.

Within the services sector, the financial & insurance sub-sector grew by 30.83 percent, compared with 28.79 and 28.21 percent in the preceding and corresponding quarters of 2023, respectively. This performance was spurred by gains from the recapitalisation exercise that was announced by the CBN, according to the report.

Other factors such as profits from interest gains (following continued hikes in interest rates), consultancy fees, and ATM & transfer fees contributed to the growth of the sub-sector.