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Comercio Partners, an investment bank, said achieving faster output growth requires strategic interventions, policy support and a focus on growth sectors.
Co-founder, Comercio Partners, Nnamdi Nwizu, stated this in an analysis of the third quarter gross domestic product (GDP) report. He noted that the 2.54 per cent in is indicative of a resilient economy as it demonstrates notable recovery from hitherto economic challenges.
“The service sector’s standout performance, with a robust 3.99 per cent growth, has played a pivotal role in driving overall economic expansion. Despite the fact that the oil sector experienced a slight contraction of -0.85 per cent, it remains a crucial contributor, contributing 5.48 per cent to the GDP,” he said.
Highlighting areas of concern in the data, Nwizu added: “The contraction in the oil sector, albeit modest at -0.85 per cent, raises concerns due to its historical significance in Nigeria’s economic landscape.
“The marginal decline in the agricultural sector’s growth to 1.3 per cent from 1.34 per cent in Q2 2023 is a nuanced concern. Agricultural activities are pivotal for food security and employment generation.
“Addressing challenges such as inadequate infrastructure, access to finance and climate-related issues becomes imperative to unlock the sector’s full potential and reduce Nigeria’s dependence on imported food products.” He said while the non-oil sector’s growth at 2.75 per cent remains positive, the 0.84 per cent decrease from Q2 2023 warrants serious attention.
Speaking on the outlook in the last quarter of the year, Nwizu expressed optimism that the oil sector may experience more positive growth despite challenges experienced in the sector.
He also projected that the non-oil sector’s performance, driven by key contributors such as information and communication, finance, agriculture, trade, construction and real estate, will continue to be positive.
Nwizu, however, noted that consideration of global economic conditions remains critical, adding that geopolitical events, trade dynamics and fluctuations in commodity prices would influence Nigeria’s economic outlook. Hence, he called for a proactive approach to navigating global uncertainties, which he said is essential for strategic decision-making.
“The Nigerian economy exhibits resilience, driven by a diversified economic base. Strategic interventions, policy support and a focus on sustainable growth sectors will be pivotal in ensuring a favourable GDP outlook for both Q4’23 and the fiscal year. Continued collaboration between the public and private sectors will contribute to the overall economic vibrancy of the country,” Nwizu said.
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