Nigeria’s GDP growth slows to 2.31% in Q1 2023 over  cash crunch-NBS

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Nigeria’s Gross Domestic Product (GDP) grew by 2.31% year-on-year in real terms in the first quarter of 2023, indicating a 1.21% points lower than 3.52% recorded in the previous quarter and 0.8% lower compared to 3.11% recorded in the corresponding period of 2022, according to the report released by report by the National Bureau of Statistics (NBS) for Q1 2023

The figure is also lower than the 3.52 percent recorded in the fourth quarter (Q4) of 2022.

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The NBS attributed the slow growth to the adverse effects of the cash crunch experienced during the quarter.

“The performance of the GDP in the first quarter of 2023 was driven mainly by the services sector, which recorded a growth of 4.35 percent and contributed 57.29 percent to the aggregate GDP,” the report reads.

“The agriculture sector grew by -0.90 percent, lower than the growth of 3.16 percent recorded in the first quarter of 2022. Although the growth of the industry sector improved to 0.31 percent relative to -6.81 percent recorded in the first quarter of 2022, agriculture, and the industry sectors contributed less to the aggregate GDP in the quarter under review compared to the first quarter of 2022.”

In the quarter examined, the NBS said aggregate GDP stood at N51.24 million in nominal terms. This performance is higher, relative to the aggregate GDP of N45.32 million recorded in Q1 of 2022 — indicating a year-on-year nominal growth of 13.07 percent.

The report said the non-oil sector grew by 2.77 percent in real terms during the quarter but was lower by 3.30 percentage points compared to the rate recorded in the same quarter of 2022, and 1.67 percentage points lower than the result of Q4 2022.

“This sector was driven in the first quarter of 2023 mainly by the information and communication (telecommunication); financial and insurance (financial institutions); trade; manufacturing (food, beverage, and tobacco); construction; and transportation & storage (road transport), accounting for positive GDP growth,” the NBS said.

“In real terms, the non-oil sector contributed 93.79 percent to the nation’s GDP in the first quarter of 2023, higher than the share recorded in the first quarter of 2022 which was 93.37 percent, and lower than the fourth quarter of 2022 recorded as 95.66 percent.”

On the flip side, the real growth of the oil sector was –4.21 percent (year-on-year) in Q1 2023, indicating an increase of 21.83 percentage points relative to the rate recorded in the corresponding quarter of 2022 (-26.04 percent).

“Growth increased by 9.18 percentage points when compared to Q4 2022 which was –13.38 percent,” the report said.

“On a quarter-on-quarter basis, the oil sector recorded a growth rate of 20.68 percent in Q1 2023. The oil sector contributed 6.21 percent to the total real GDP in Q1 2023, down from the figure recorded in the corresponding period of 2022, and up from the preceding quarter, where it contributed 6.63 percent and 4.34 percent respectively.”

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