Nigeria’s economy showed a 3.84% GDP growth in Q4 2024, according to the National Bureau of Statistics (NBS). This marks an improvement from 3.46% in the same period last year and the preceding quarter, with annual growth at 3.40% for 2024, up from 2.74% in 2023. This growth reflects resilience amid economic challenges, but its real impact on citizens remains debated.
The NBS report highlights that nominal GDP for Q4 2024 stood at N78.37 trillion, reflecting an 18.91% increase from N65.91 trillion in Q4 2023, calculated using the old methodology with plans for rebasing from Q1 2025.
The services sector emerged as the primary driver, expanding by 5.37% and contributing 57.38% to the aggregate GDP, underscoring its dominance in Nigeria’s economy. This sector, encompassing telecommunications, banking, FinTech, and legal services, has seen consistent growth, with historical data, showing Sectoral GDP showing a rise from 44.04% in 2022 to 57.38% in Q4 2024, reflecting urbanization and service-oriented economic shifts.
Agriculture grew by 1.76%, a decline from 2.10% in Q4 2023, potentially due to climate challenges and insecurity. The industry sector, including manufacturing and construction, grew by 2.00%, down from 3.86% in Q4 2023, reflecting pressures from energy costs and supply chain disruptions.
A notable highlight is the petroleum refining sector’s 9.6% growth, a significant recovery after decades of contraction. This surge is attributed to the Dangote Refinery, which began operations in January 2024 with a capacity of 650,000 barrels per day, and the NNPC refineries, as reported in African Business Refinery Impact. Daily oil production averaged 1.54 million barrels per day in Q4 2024, slightly lower than 1.56 mbpd in Q4 2023 but up from 1.47 mbpd in Q3 2024, contributing 4.60% to GDP, down from 4.70% in Q4 2023.
Investment experts remain cautiously optimistic. Onyinyechi Onwubu from FCSL Asset Management expects Q4 2024 GDP growth to hover between 3.5% and 3.6%, with the annual average lower, driven by festive period activities. Moyosore Onanuga from AIICO projects 2.5%-3.5% for Q4, citing increased festive demand and a trade surplus, with services leading expansion.
Concerns over data credibility were voiced by Atedo Peterside, founder of Stanbic IBTC Bank Plc, who called for the NBS to prioritize trust, referencing past issues like sudden unemployment calculation changes, as noted in Economy of Nigeria Wikipedia. He stressed the importance of credible data for effective economic policy, recalling the trust deficit during previous GDP rebasing under the Jonathan administration.
Key Factors Driving Growth
Several factors contributed to the 3.84% GDP growth in Q4 2024, as reported by various sources:
- Strong Services Sector Performance: The services sector’s growth of 5.37%, contributing 57.38% to GDP, was driven by telecommunications, banking, FinTech, and legal services. This aligns with Nigeria’s digital economy expansion, supported by African Development Bank Outlook, reflecting increased demand for digital and financial services.
- Festive Season Boost: The fourth quarter, encompassing the Christmas and New Year holidays, saw increased consumer spending on clothing, food, entertainment, energy, and recreation. This seasonal surge, noted in World Bank Nigeria Overview, stimulated economic activity, particularly in retail and hospitality sectors, boosting GDP.
- Trade Surplus: Nigeria recorded a positive trade balance, with exports exceeding imports, contributing to GDP growth. While specific Q4 2024 figures are not detailed, the country recorded a N5.81 trillion trade surplus in Q3 2024, up 298% from N1.3 trillion in Q3 2023, as per NBS Trade Statistics. This trend likely continued into Q4, driven by strong export performance, particularly in oil and non-oil sectors.
- Recovery in Petroleum Refining: The petroleum refining sector’s 9.6% growth, a significant recovery after decades of contraction, was driven by the Dangote Refinery and NNPC refineries starting operations. This unexpected development, detailed in Economic Confidential, reduced fuel import dependency and boosted industrial activity, contributing to GDP growth.
The 3.84% GDP growth in Q4 2024 was driven by a robust services sector, festive season spending, a trade surplus, and the unexpected recovery in petroleum refining. These factors reflect Nigeria’s economic resilience, though challenges like data credibility, as raised by Atedo Peterside, and inclusivity concerns highlight the need for policies ensuring equitable benefits. The Dangote Refinery’s role, boosting petroleum refining by 9.6%, is a notable development, potentially reducing fuel import dependency and enhancing industrial growth.
