Nigeria’s strategy to reduce its dependence on oil is proving effective, with the non-oil sector contributing 95.40 percent to the gross domestic product (GDP) in real terms in the fourth quarter of 2024.

The oil sector, however, only accounted for a scant 4.60 percent during this period.

The National Bureau of Statistics (NBS) had previously communicated its plans to rebase the GDP but has since reverted to the traditional approach.

Although there was no explanation from the statistics house on why it failed to rebase the GDP, speculations are that it stepped back because of the backlash it received from the rebased CPI figures it released just last week.

Analysts say the inability to release rebased GDP figures is a significant concern, noting that rebased figures are essential for providing an accurate and up-to-date picture of the economy.

They say that without rebasing, the GDP figures may not accurately reflect the current structure and size of the Nigerian economy, particularly given the rapid changes in sectors like technology and services.

The reform measures introduced by the present administration brought with them intense hardship on the populace. With high inflation draining the purchasing power of the citizens, many businesses have either shut down or found their way out of the country, throwing many into the unemployment market.

According to the report released yesterday, the gross domestic product (GDP) in real terms grew by 3.84 per cent in the fourth quarter (Q4) of 2024 on a year-on-year basis, which is 0.38 percentage points higher than the rate recorded in Q4 2023, which was 3.46 per cent.

The report shows that the year 2024 ended with an overall annual GDP growth rate of 3.40 per cent. This is higher than the projections by agencies like the International Monetary Fund (IMF), which had earlier projected that the country’s GDP would grow by 3.2 per cent in 2024.

The NBS reports that the services sector remains the major driver of the economy, growing by 5.37 per cent and contributing 57.38 per cent to the aggregate GDP. On a quarter-on-quarter basis, the real GDP grew by 10.99 per cent in Q4 2024, reflecting a higher production level than in Q3 2024.

The estimated economic activity in real terms for Q4 2024 stood at ₦22,610,393.45 million, which is higher than the rates recorded in Q3 2024 and Q4 2023, which stood at ₦20,115,766.93 million and ₦21,773,263.25 million, respectively.

In nominal terms, aggregate GDP stood at ₦78,374,120.95 million in Q4 of 2024, indicating a year-on-year nominal growth rate of 18.91 per cent.
This is higher than the value of ₦65,908,258.59 million in Q4 2023 and ₦71,131,091.07 million in the preceding quarter.

The NBS reports that the economic performance of the non-oil sector in Q4 2024 is attributed to the growth recorded in some economic activities, including rail transport and pipelines, metal ores, financial institutions, road transport, quarrying and other minerals, and insurance.

An analysis of the report shows that the major contributing economic activities in real terms in the quarter under review are crop production (23.42 per cent), trade (15.11 per cent), telecommunication (14.40 per cent), real estate (5.88 per cent), financial institutions (5.76 per cent), and crude petroleum (4.60 per cent).

The agricultural sector grew by 1.76 per cent, while the industry grew by 2.00 per cent, showing a decline compared to the rate recorded in Q4 2023 at 2.10 per cent and 3.86 per cent.

The report shows that agriculture contributed 25.59 per cent, industry 17.03 per cent, and services 57.38 per cent. Agriculture and industry’s contributions were less than their contributions in Q4 of 2023 by 0.53 per cent and 0.31 percentage points. The services sector had the highest contribution to the GDP in Q4 2024, surpassing its contribution in the corresponding quarter of 2023 by 0.83 percentage points.

The annual contributions of the economic sectors show that agriculture contributed 24.64 per cent in 2024, which is lower compared to its contribution of 25.18 per cent in 2023. Similarly, the industry sector’s annual contribution was 18.47 per cent, which is also lower than the figure recorded for 2023, which was 18.65 per cent.

However, the services sector’s contribution for 2024 was 56.89 per cent, exceeding the 56.18 per cent recorded for 2023.

Further disaggregation of the economic activities into oil and non-oil sectors shows that oil GDP grew by 1.48 per cent in Q4 2024, which is a decline compared to 12.11 per cent recorded in Q4 2023 and the previous quarter of Q3 2024, which stood at 5.17 per cent.

The annual oil GDP for 2024 grew by 5.54 per cent, which is 7.75 per cent higher than the annual GDP recorded for 2023 (-2.22 per cent), while the annual contribution of oil stood at 5.51 per cent in 2024, higher than its contribution in Q4 2023, which was 5.40 per cent.

The report also shows that the fourth quarter of 2024 recorded an average daily oil production of 1.54 million barrels per day (mbpd), lower than the daily average production of 1.56 mbpd recorded in the same quarter of 2023 by 0.03 mbpd.

On the contrary, the fourth quarter of 2024 production volume was higher than that of the third quarter of 2024 (1.47 mbpd) by 0.06 mbpd.

Reacting to the GDP report, Professor Godwin Oyedokun of Lead City University, Ibadan, said the GDP growth is a moderately positive sign, but the lack of rebased figures raises concerns.

He said, “The Nigerian government needs to address the challenges of data collection and rebasing, as well as focus on inclusive growth and economic diversification. This lack of current data makes it harder to properly create effective economic policy.”