The 3.54% GDP growth in the second quarter of 2022 marked the seventh consecutive quarterly GDP growth since the exit from recession in the fourth quarter of 2020. This report reflects the resilience of the Nigerian economy amid extreme macroeconomic challenges, galloping inflation, currency depreciation, foreign exchange illiquidity, high energy cost, heightened insecurity, weakening purchasing power, structural bottlenecks and trade facilitation issues.
Sectors that posted positive growth
The real sector of the economy grew marginally as agriculture grew by 1.2%; manufacturing 3%; and construction 4.2%. The service sector growth outperformed the real sector, reflecting the sectoral variabilities in the constraints faced by investors in the economy. Road transport for instance grew by 56.4%, which represented the highest sectoral growth. Air transport grew by 22.5%; financial services 20%; ICT 7.71%; trade sector 4.5% and real estate 4.4%. These were the sectors that posted positive growth in the second quarter of this year.
Sectors that Contracted
The NBS report identified the following sectors as having experienced contraction in the second quarter of this year: The highest contraction was in oil refining which was 42%, rail transportation 38%, crude oil and gas 11.8%, metal ores 25.5%, electricity vehicle assemblies 7.8%, electricity and air-conditioning 7%; motion pictures and music 6%, textiles 2.8%. The key drivers of these contractions include the following:
- The continued inactivity of the country’s major refineries, all of which have been posting losses in recent years.
- The cloud of insecurity hovering over the railway system which has caused the suspension of railway services.
- Crude oil theft and vandalization of oil facilities in the oil producing areas. By NNPC estimates, the country loses two billion dollars monthly on account of oil theft. Loses are also suffered on account of vandalization of oil facilities, pipelines and the activities of illegal refineries.
- Productivity and competitiveness issues continue to impact negatively on the performance across sectors of the economy.
- The general operating environment continues to be very challenging for most investors. The SMEs were particularly more vulnerable to prevailing macroeconomic shocks, resulting in high mortality rate of small businesses… Read More below