Nigeria Economy Grows Around 3% in Q1 Driven by Oil, Services

Nigeria’s economy grew 2.98% in the first quarter of this year, lifted by its oil and services sectors, statistics agency data showed on Friday.

The growth rate was quicker than the 2.31% recorded in the first quarter of 2023 but slower than the 3.46% seen in the fourth quarter of last year.

Although it was the 14th consecutive quarter that the economy has grown, the first-quarter growth rate was still well short of the 6% annual expansion President Bola Tinubu targeted when he took over last year.

Tinubu has implemented reforms including slashing fuel and electricity subsidies and devaluing the local naira currency twice to try to lift investment and boost output. But those policies have also worsened a cost-of-living crisis by spurring inflation, which hit a 28-year high of 33.69% in April.

The National Bureau of Statistics said the services sector grew 4.32% year-on-year in the first quarter, contributing about 58% to aggregate gross domestic product.

The oil sector, which accounts for the bulk of government revenue and 90% of foreign-exchange reserves, expanded by 5.70%, while agriculture eked out 0.18% growth. Industrial output rose 2.19%.

Nigeria, Africa’s top oil producer, recorded average daily oil output of 1.57 million barrels per day (mbpd) in the first quarter, up from the daily average of 1.51 mbpd registered in the same quarter of 2023.

Analysts say restrictive central bank policy is one factor restraining growth, after the Central Bank of Nigeria raised its policy rate for the third time this year to 26.25% this week.

The International Monetary Fund forecasts Nigeria’s economy will grow 3.3% this year.

Report courtesy: REUTERS