Nigerian economy grows faster than expected driven by non-oil sector
Nigeria’s economy grew faster than expected in the fourth quarter, driven by growth in the non-oil sector.
Africa’s biggest economy grew 3.52% year-on-year in the three months through December compared with 2.25% in the third quarter, the National Bureau of Statistics said in a report on Wednesday. The median estimate of four economists in a Bloomberg survey was 2.5%.
The data, a rare bright spot amid high inflation and widespread joblessness, comes days before Nigerians vote in a hotly-contested presidential election as shortages of both gasoline and cash spread nationwide. The leading candidates have all vowed to fix an economy in fiscal crisis.
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The expansion for the period was driven mainly by the services sector, which grew by 5.69%, and contributed over half of GDP, the statistics agency said, adding that floods slowed growth in agriculture to 2.05% compared to 3.6% in the preceding third quarter.
The non-oil economy increased 4.4% in the quarter from a year earlier, largely driven by growth in telecommunications, trade and agriculture, while the oil sector contracted 13.4% as production dropped to 1.34 million barrels day on average. That compared to 1.5 million barrels a day a year ealier.
Nigeria has been trying to ramp up production to reach its full OPEC+ quota but has been beset by ongoing supply disruptions. While there has been an improvement in output of some crude grades, it won’t be enough for the country to reach its OPEC+ target level this year or 2024, Facts Global Energy said in a research note on Wednesday.
The Central Bank of Nigeria last month surprisingly raised its benchmark interest rate by 100 basis-points, its highest level in 17 years, citing persistent inflation, which rose to 21.8% in January, the highest since 2005.
