JUST IN: Nigeria’s GDP Slows to 2.31% in Q1 of 2023

By Aduragbemi Omiyale

Nigeria’s economic growth slowed to 2.31 per cent in the first quarter of 2023 from the 3.52 per cent achieved in the fourth quarter of 2022 and 3.11 per cent reported in the first three months of last year.

This revelation was made by the National Bureau of Statistics (NBS) in its Gross Domestic Product (GDP) data released on Wednesday, May 24, 2023.

The country’s economy was on its knees in the first three months of this year because of the preparations for the 2023 general elections and the cash crunch.

The Central Bank of Nigeria (CBN) redesigned the Naira last year and gave till February 10 to swap the old notes with the new dominations of N200, N500, and N1,000.

However, the policy triggered economic hardship and riots across the country and resulted in the intervention of the Supreme Court, which pushed the deadline forward to December 2023.

The CBN Naira redesign policy seems to have been abandoned as the new notes are not seen in circulation as expected ahead of the new deadline for the validity of the old currency notes.

In its data released today, the stats office said the decline in the economic growth in the period under review could be “attributed to the adverse effects of the cash crunch experienced during the quarter.”

It stated that, “The performance of the GDP in the first quarter of 2023 was driven mainly by the services sector, which recorded a growth of 4.35 per cent and contributed 57.29 per cent to the aggregate GDP.”

“The agriculture sector grew by -0.90 per cent, lower than the growth of 3.16 per cent recorded in the first quarter of 2022.

“Although the growth of the industry sector improved to 0.31 per cent relative to – 6.81 per cent recorded in the first quarter of 2022, agriculture and the industry sectors contributed less to the aggregate GDP in the quarter under review compared to the first quarter of 2022,” a part of the release said.

The NBS disclosed that the real growth of the oil sector was –4.21 per cent on a year-on-year basis in Q1 2023, indicating an increase of 21.83 per cent relative to the rate recorded in the corresponding quarter of 2022 at -26.04 per cent.

It said growth increased by 9.18 per cent when compared to Q4 2022, which was –13.38 per cent, and on a quarter-on-quarter basis, the oil sector recorded a growth rate of 20.68 per cent in Q1 2023.

The sector, according to the stats office, contributed 6.21 per cent to the total real GDP in Q1 2023, down from the figure recorded in the corresponding period of 2022 and up from the preceding quarter, where it contributed 6.63 per cent and 4.34 per cent, respectively.

As for the non-oil sector, it grew by 2.77 per cent in real terms during the reference quarter, lower by 3.30 per cent points compared to the rate recorded in the same quarter of 2022 and 1.67 per cent points lower than the fourth quarter of 2022.

This sector was driven in the first quarter of 2023 mainly by Information and Communication (Telecommunication); Financial and Insurance (Financial Institutions); Trade; Manufacturing (Food, Beverage & Tobacco); Construction; and Transportation & Storage (Road Transport), accounting for positive GDP growth.

In real terms, the non-oil sector contributed 93.79 per cent to the nation’s GDP in the first quarter of 2023, higher than the share recorded in the first quarter of 2022, which was 93.37 per cent and lower than the fourth quarter of 2022 recorded as 95.66 per cent.