…Non-oil sector dominates as oil contribution shrinks
Nigeria’s economy recorded significant growth in the fourth quarter (Q4) of 2024, with the country’s Gross Domestic Product (GDP) expanding by 3.84%, according to the latest report from the National Bureau of Statistics (NBS).
The report, published on February 25, 2025, highlights a steady economic rebound, surpassing the 3.46% growth recorded in Q3 2024 and the 3.46% growth in Q4 2023.
Services Sector Fuels Economic Expansion
The economic boost was largely driven by the services sector, which grew by 5.37% and contributed a dominant 57.38% to the total GDP. Meanwhile, the agriculture sector saw a slight decline, recording 1.76% growth, down from 2.10% in Q4 2023. The industry sector also slowed, posting a 2.00% growth rate, lower than the 3.86% recorded in the same period in 2023.
Overall, Nigeria’s annual GDP growth for 2024 stood at 3.40%, up from 2.74% in 2023. The country’s nominal GDP for Q4 2024 was reported at ₦78.37 trillion, reflecting an 18.91% year-on-year growth compared to Q4 2023.
Oil Sector Declines Despite Economic Growth
Despite the economic expansion, Nigeria’s oil sector witnessed a decline, with average oil production dropping to 1.54 million barrels per day (mbpd) in Q4 2024, a slight dip from 1.56 mbpd in Q4 2023.
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The oil sector’s real GDP growth also fell to 1.48%, a sharp decline from 12.11% recorded in Q4 2023. Quarter-on-quarter, the sector contracted further, posting a -7.19% growth rate in Q4 2024.
Additionally, oil’s contribution to Nigeria’s total real GDP shrank to 4.60% in Q4 2024, down from 4.70% in Q4 2023, reflecting a continued shift away from reliance on crude oil.
Non-Oil Sector Strengthens, Driving 95.40% of GDP Growth
The non-oil sector remained the backbone of Nigeria’s economy, accounting for 95.40% of GDP growth in Q4 2024, an increase from 95.30% in Q4 2023.
The sector posted a 3.96% growth rate in real terms, outpacing the 3.07% recorded in Q4 2023 and the 3.37% in Q3 2024. Key drivers of this growth included financial and insurance services, telecommunications, crop production, transportation, trade, and manufacturing.
Although the non-oil sector dominated in Q4, its total contribution to annual GDP slightly declined to 94.49% in 2024, compared to 94.60% in 2023.
Inflation Rate Declines as Economy Stabilizes
In a positive sign for economic stability, Nigeria’s inflation rate dropped from 34.8% in December 2024 to 24.48% in January 2025, according to an earlier announcement by the NBS on February 18, 2025.
The decline in inflation suggests a potential easing of economic pressures, offering hope for improved purchasing power and consumer confidence in 2025.
With a growing non-oil sector, improved GDP figures, and declining inflation, Nigeria’s economy is showing signs of resilience, though challenges in the oil sector remain a key concern for policymakers.