GDP Grows By 3.19% in Q2

Ndubuisi Francis, Olawale Ajimotokan and James Emejo in Abuja

President Bola Tinubu yesterday, welcomed the latest report by the National Bureau of Statistics (NBS) on the state of the economy, as the country’s Gross National Product (GDP) posted another growth.

Tinubu was quoted to have made the remarks in a statement by his Special Adviser to the President on Information and Strategy, Bayo Onanuga.

This comes as the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday, unveiled the implementation committee of the Accelerated Stabilisation and Advancement Plan (ASAP), which is aimed at revitalising key sectors of the economy.

The ASAP, which seeks to drive sustainable development across eight priority sectors of the economy, including agriculture, energy, and health, is aimed at addressing key challenges affecting the federal government’s reform initiatives and stimulating development in various sectors of the economy.

Specifically, the country’s GDP grew by 3.19 percent, year-on-year, in real terms in the second quarter of the year (Q2 2024), compared to 2.51 percent in Q2 2023, the NBS disclosed.

The performance was also higher than 2.98 per cent recorded in the first quarter of the year (Q1 2024).

According to the Gross Domestic Product (GDP) Q2 2024 report, released by the statistical agency, growth was driven mainly by the services sector, which grew by 3.79 percent and contributed 58.76 percent to the aggregate GDP.

In the quarter under review, aggregate GDP at basic price increased by 16.94 percent to N60.93 trillion in nominal terms, compared to N52.10 trillion in the same quarter of 2023. The real GDP was N18.29 trillion.

Agriculture grew by 1.41 percent from the growth of 1.50 percent recorded in the second quarter of 2023.

Also, industry grew 3.53 per cent, an improvement from -1.94 per cent in Q2 2023.

In terms of share of the GDP, the industry and services sectors contributed more to the aggregate GDP in the review period compared to the corresponding quarter of last year.

In real terms, non-oil sector contributed 94.30 per cent to the economy, higher than 93.62 per cent in the preceding quarter, and lower than 94.66 per cent in Q2 2023.

The sector grew by 2.80 per cent in real terms in Q2 almost unchanged from Q1, and lower than 3.58 per cent in Q2 2023.

The sector was driven mainly by financial and insurance information and communication, agriculture, trade, and manufacturing which accounted for positive growth.

On the other hand, the oil sector contributed 5.70 percent to growth, compared to 6.38 percent in the preceding quarter but lower than

5.34 per cent in Q2 2023.

According to the NBS, real growth of the oil sector stood at 10.15 percent, year-on-year, under the review quarter, indicating an increase of 23.58 percent points relative to -13.43 percent in the corresponding quarter of 2023.

Quarter on quarter, the oil sector, however, growth by -10.51 per cent in Q2.

Agriculture contributed 22.61 percent to GDP Q2, compared to 21.07 percent in the preceding quarter, and lower than 23.01 percent in Q2 2023.

The sector grew by 1.41 percent, year-on-year, a decrease of 0.09 percent from the corresponding period of 2023, and an increase of 1.22 percent compared to 0.18 percent in Q1.

The manufacturing sector contributed 12.68 percent to growth in the period under review, lower than 14.79 percent in the preceding and 14.55 percent in the corresponding quarter.

Trade contributed 15.95 percent to the economy compared to 11.72 percent in the preceding quarter and 12.79 percent in Q2 2023.

The Information and Communication (ICT) contributed 19.78 percent to GDP in Q2 compared to 17.89 percent in the preceding quarter and 19.54 percent in the corresponding quarter of last year.

Furthermore, the entertainment and recreation sector contributed 0.18 per cent to nominal GDP in Q2 compared to 0.24 per cent in the preceding quarter and 0.14 per cent in Q2 2023.

Reacting to the latest GDP figures, the President noted that the latest report on declining food and headline inflation only affirmed that the economy was on the right trajectory and was indeed on the path to recovery.

 “As the President said in his August 4, 2024 national broadcast, our economy is recovering. Sooner than later, Nigerians will begin to feel, see, and enjoy the impact of his administration’s economic re-engineering efforts. 

“We want to reiterate that this government will continue to work assiduously to rekindle Nigerians’ hope and confidence. President Tinubu is working to build a solid and resilient economy,” Onanuga said.

The statement added that Tinubu also urged Nigerians to have faith in the government and not allow themselves to be swayed by naysayers bent on aborting and undermining the current reforms for their selfish ends.

“We are confident that with the policies we have put in place, we expected production to rise to about two million barrels very soon,” the statement quoted Tinubu as saying. 

According to the Presidency, the aggregate GDP at basic price stood at N60,930,000.58 million in nominal terms in the quarter under review in terms of performance was higher than the second quarter of 2023, which recorded an aggregate GDP of N52,103,927.13 million, indicating a 16.94 percent year-on-year nominal growth.

In a related development, financial expert and Director of the Institute of Capital Market Studies (ICMS), Nasarawa State University, Prof. Uche Uwakeke, in appraising the latest GDP report called for a reset of the “faulty economic structure”, leveraging technology, in favour of the productive sectors, including industry and agriculture.

Uwaleke, observed that the aggressive hike in Monetary Policy Rate (MPR) in February and March 2024 by the Central Bank of Nigeria (CBN) took a toll on output in Q2 2024.

This, he noted, may explain the decline recorded in major contributors to GDP such as Manufacturing, Trade, ICT and Real Estate.

Uwaleke, a former Commissioner for Finance, Imo State stated that the impact of the high cost of petroleum products manifested in the huge decline in Transport GDP from 3.33 per cent to 13.53 per cent.

“Just like in Q1 2024, when growth was driven by the oil sector, growth in Q2 2024 was also driven by the oil sector at 10.15 per cent.

“Oil sector growth was aided largely by the increase in crude oil price during the quarter as average crude oil production fell (from 1.57mbpd in previous quarter to 1.41mbpd)

“The Non-oil sector performance was powered by the Services sector chiefly Financial services and ICT. This sector’s contribution to GDP in Q2 was 2.80 percent, the same as in Q1 2024.

“Manufacturing and agriculture sectors appeared hugely impacted by economic headwinds during the quarter. Growth rates were a mere 1.28 percent and 1.41 percent respectively.

Uwaleke who is also the President of Association of Capital Market Academics of Nigeria (ACMAN) stated that the financial sector grew by 28.79 percent, a clear demonstration that it is detached from the productive sectors of the economy.

The university Don said: “In my view, this identified growth pattern, weighted in favour of the services sector, is not healthy for a developing economy such as ours.

“Little wonder, economic growth does not appear inclusive reflecting in rising unemployment and poverty levels.

“It is time we reset this faulty economic structure, leveraging technology, in favour of the productive sectors: Industry and Agriculture.

“Indeed, structural change is strongly recommended (by UNCTAD) as one of the ingredients of building productive capacities.”

Meanwhile, Edun, has unveiled the implementation committee of the ASAP, which is aimed at revitalising key sectors of the economy.

Edun, who spoke in Abuja, when he chaired the first inaugural meeting of the ASAP Implementation Committee, said it marked a significant milestone in Nigeria’s renewed commitment to addressing critical economic challenges and fostering sustainable development across key sectors.

Quoting the minister, the Director, Information and Public Relations, Ministry of Finance, Mohammed Manga, in a statement said the landmark initiative was a key component of Tinubu’s reform agenda, which aims to drive sustainable development across eight priority sectors of the economy, including agriculture, energy, and health

In his opening remarks, Edun highlighted the collaborative nature of the project, informing the committee that they would work closely with technical experts from various government agencies to establish clear milestones and ensure the effective execution of ASAP.

He expressed the government’s dedication to addressing key issues such as agricultural productivity and announced a coordinated dry season farming initiative, between the Federal Ministry of Finance, the Central Bank of Nigeria, the Federal Ministry of Agriculture and Food Security (FMAFS), as well as the African Development Bank (AfDB), collaborating to ensure the timely delivery of fertilisers and other critical inputs to farmers.

The meeting brought together key government officials, including; the  Minister of Agriculture and Food Security, Senator Abubakar Kyari; the Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu; the Coordinating Minister of Health and Social Welfare, Dr. Muhammad Ali Pate;  Minister of Power, Chief Adebayo Adelabu, and the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo as well as the Director General of the Budget Office of the Federation, Tanimu Yakubu, among others.

“As the ASAP Implementation Committee moves forward, it will focus on driving progress in each of the identified priority areas, ensuring that the Plan’s objectives are met with precision and accountability.

“With the ASAP Implementation Committee underway, Nigeria is poised to witness a transformative era of economic growth and development.

” Under the Chairmanship of HM Edun, the committee will work tirelessly to ensure the effective execution of the Plan, addressing critical issues and fostering collaboration among government agencies and stakeholders.

“As the committee drives progress in each priority area, Nigeria can expect a brighter economic future, marked by precision, accountability, and sustainable development,” the statement said.