Service Sector Accounted for 58.76% of Total GDP in Q2 2024

Arthur Eriye

Data released by the National Bureau of Statistics (NBS) has revealed Nigeria’s Gross Domestic Product (GDP) grew by 2.98 per cent (year-on-year) in real terms during the first quarter of 2024.

From the data, it could be inferred that the services sector was the key driver of Nigeria’s GDP growth, with a substantial increase of 3.78 per cent. This sector alone accounted for 58.76 per cent of the total GDP, which was instrumental to the country’s economic performance. Agriculture also showed a positive trajectory, with a growth of 1.41 per cent, up from 1.50 per cent in the second quarter of 2023.

The NBS report stated that the aggregate nominal GDP at the basic price was N60,930,000.58 million. This is much better than the second quarter, when the GDP was N52,103,927.13 million, reflecting a nominal growth rate of 16.94 per cent year over year.

Also, the top seven sector that contributed to the country’s turned out to be, agriculture, information and communication, trade, manufacturing, finance and insurance, mining and quarrying as well the oil sector.

Agriculture

The agricultural sector in the second quarter of 2024 grew by 1.41 per cent (year-on-year) in real terms, a decrease of 0.09 per cent points from the corresponding period of 2023, and an increase of 1.22 per cent points from the preceding quarter which recorded a growth rate of 0.18 per cent. It grew on a quarter-on-quarter basis at 7.35 per cent.

The sector contributed 22.61 percent to overall GDP in real terms in the second quarter of 2024, lower than the contribution in the second quarter of 2023 at 23.01 percent and higher than the first quarter of 2024 which stood at 21.07 percent.

Information and Communication

In nominal terms, in the second quarter of 2024, the sector growth was recorded at 11.86 per cent (year-on- year), 29.81 per cent points decrease from the rate of 41.67 per cent recorded in the same quarter of 2023, and 2.08 per cent points lower than the rate recorded in the preceding quarter. The quarter-on- quarter growth rate recorded in the second quarter of 2024 was 11.91 per cent. The Information and communication sector contributed 19.78 percent in the second quarter of 2024, higher than in the same quarter of the previous year at 19.54 percent and higher than in the first quarter of 2024 at 17.89 percent.

Trade

In real terms, Trade’s year-on-year growth stood at 0.70 per cent in the second quarter of 2024, which was 1.71 per cent points lower than the rate recorded in the previous year at 2.41 per cent, and 0.53 per cent points lower than in the preceding quarter at 1.23 per cent growth rate. Quarter-on-quarter growth stood at 4.42 per cent. This growth was higher than the quarter-on-quarter growth recorded in the first quarter of 2024 at -14.98 per cent. The trade sector’s contribution to GDP was 16.39 percent, lower than the 16.8 percent in the previous year, and higher than the 15.7 percent recorded in the first quarter of 2024.

Manufacturing

The Manufacturing sector in the second quarter of 2024 was recorded at 1.91 per cent (year-on-year), 27.99 per cent points lower than the figure recorded in the corresponding period of 2023 (29.90%) and 6.30 per cent points lower than the preceding quarter figure of 8.21 per cent. Quarter-on- quarter, growth of the sector was recorded at -11.25 per cent during the quarter. The contribution of Manufacturing to Nominal GDP in the second quarter of 2024 was 12.68 per cent, lower than the figure recorded in the corresponding period of 2023 at 14.55 per cent and lower than the first quarter of 2024 at 14.79 per cent.

Finance and Insurance

The Finance and Insurance Sector grew at 86.59 per cent in nominal terms (year-on-year), with the growth rate of Financial Institutions at 88.87 per cent and 64.14 per cent growth rate recorded for Insurance. The overall rate was higher than Q2 2023 by 58.59 per cent points, and higher by 44.41 per cent points than the preceding quarter. The quarter-on- quarter growth was 30.14 per cent. The sector’s contribution to the nominal GDP was 6.39 per cent in Q2 2024, higher than the 4.01 per cent it represented a year previous, and higher than the contribution of 5.09 per cent it made in the preceding quarter.

The contribution of Finance and Insurance to real GDP totaled 6.57 percent, higher than the contribution of 5.26 percent recorded in the second quarter of 2023 by 1.31 per cent points, and lower than 6.81 percent recorded in Q1 2024 by 0.24 percent points.

Mining and Quarrying

In real terms, the Mining and Quarrying sector grew by 7.79 per cent (year-on-year) in the second quarter of 2024. Compared to the same quarter of 2023 and the first quarter of 2024, it was higher by 19.95 per cent points and higher by 1.48 per cent points respectively. Quarter- on- quarter, the growth rate recorded was -9,87 per cent during the quarter. The contribution of Mining and Quarrying to Real GDP in the quarter under review stood at 5.83 per cent, higher than the rate of 5.58 per cent recorded in the corresponding quarter of 2023 and lower than the 6.47 per cent recorded in the first quarter of 2024.

The contribution of mining and quarrying to real GDP in the second quarter of 2024 was at 5.83 percent, higher than the rate of 5.58 percent recorded in the corresponding quarter of 2023 and lower than the 6.47 percent recorded in the first quarter of 2024.

Oil Sector

The real growth of the oil sector was 10.15 per cent (year-on-year) in Q2 2024, indicating an increase of 23.58 per cent points relative to the rate recorded in the corresponding quarter of 2023 (-13.43%). Growth increased by 4.45 per cent points when compared to Q1 2024 which was 5.70 per cent. On a quarter-on-quarter basis, the oil sector recorded a growth rate of -10.51 per cent in Q2 2024. The Oil sector contributed 5.70 per cent to the total real GDP in Q2 2024, up from the figure recorded in the corresponding period of 2023 and down from the preceding quarter, where it contributed 5.34 per cent and 6.38 per cent respectively.

Commenting, Director, Institute of Capital Market Studies, Uche Uwaleke, said that the aggregate GDP growth of 3.1 per cent in the second quarter of 2024 may not significantly impact people owing to the growing population.

“The 3.1 percent is still weak if we look at the average we have done in the last 5-6 years. It’s been under 2.5 percent and there’s a situation where the population is growing above the GDP growth rate, so there won’t be much of that impact,” he said in an exclusive interview with Arise News, THISDAY broadcast arm.