Non-oil sector contributed 95.3% to Nigeria’s GDP in Q4 2023
The non-oil sector contributed around 95.30% to Nigeria’s GDP in the last three months of the year according to the Nigeria Bureau of Statistics 2023 fourth quarter GDP report.
This percentage is below the 95.66% recorded in the fourth quarter of 2022, yet it surpasses the 94.52% noted in the third quarter of 2023.
In the quarter under review, the non-oil sector experienced a growth of 3.07% in real terms. This growth rate was 1.37% points lower than the growth rate observed in the same quarter of 2022 but it was 0.32% points higher than the growth seen in the third quarter of 2023.
The growth of the non-oil sector in the fourth quarter of 2023 was primarily fuelled by key industries such as Financial and Insurance (Financial Institutions); Information and Communication (Telecommunication); Agriculture (Crop Production); Trade; Construction; Manufacturing (Food, Beverage, and Tobacco); and Real Estate.
These sectors played a significant role in contributing to the positive growth of the GDP. On an annual level, the growth rate of the non-oil sector for 2023 was recorded at 3.04%, which is a decrease from the 4.84% growth rate seen in 2022.
Insights
The Nigerian informal sector forms an integral part of the nation’s economy with around 92.3% of employed individuals in the country playing in the sector.
A significant part of those in the informal sector in the country is self-employment which is the status of 87% working-age Nigerians.
The huge contribution of the sector mirrors the structure of the Nigerian economy which is largely dominated by MSMEs. The group of businesses constitute around 96.7% of the country.
However, the sector is riddled with issues such as low taxation, weak unions, unfair competition, a loss of regulatory control, and disregard for health and safety standards, among others. In terms of taxes, Nigeria’s tax-to-GDP currently stands at 10% one of the lowest in the world. However, the federal government hopes to increase the figure to around 18% in the next three years.
