Nigeria’s economic growth surprises to upside on services sector

Bloomberg | Nigeria’s economy grew faster than anticipated in the third quarter, buoyed by its services and oil sectors.

Gross domestic product (GDP) expanded an annual 3.46 percent in the three months through September, compared with growth of 3.19 percent in the previous quarter, according to data released by the Abuja-based National Bureau of Statistics on Monday. The median estimate of six economists in a Bloomberg survey was 2.86 percent.

The oil sector grew 5.17 percent as production increased to 1.47 million barrels per day, from 1.45 million barrels a year earlier, as it addresses security concerns and aging infrastructure.

The sector is expected to receive a further boost from the start of gasoline production at Nigerian billionaire Aliko Dangote’s mega oil refinery in September, and an increase in its processing rate to 420,000 barrels per day, as well as new fields coming online.

The 2025 budget to be presented by President Bola Tinubu on November 27 assumes crude output increasing to 2.06 million barrels a day and an oil price of US$75 per barrel, which if achieved, may further lift growth.

The non-oil sector grew 3.37 percent in the period, from 2.8 percent a year ago, mainly driven by the services sector, which expanded 5.19 percent, contributing more than half to the aggregate GDP, the statistics agency said.

Agriculture output slowed to 1.1 percent from 1.4 percent in the prior three months, after recent floods washed away crops that the United Nations estimates would have fed 8.5 million for six months.