Nigeria’s economy maintained its upward trajectory in the final quarter of 2024, with the Gross Domestic Product (GDP) growing by 3.84% year-on-year in real terms, according to the latest data released by the National Bureau of Statistics (NBS). This growth rate marks an improvement from the 3.46% recorded in the same period in 2023 and surpasses the third-quarter growth rate of 2024.
The NBS report highlights that the services sector was the primary driver of economic expansion, recording a robust growth rate of 5.37% and contributing 57.38% to the aggregate GDP. This performance underscores the sector’s increasing dominance in Nigeria’s economic landscape, as it continues to outpace agriculture and industry in terms of growth and contribution to national output.
Sectoral Performance: Services Shine, Agriculture and Industry Lag
While the services sector thrived, the agriculture sector experienced a slowdown, growing by just 1.76% in Q4 2024, down from 2.10% in the same period in 2023. Similarly, the industry sector grew by 2.00%, a significant decline from the 3.86% growth recorded in Q4 2023. The contrasting performances of these sectors highlight the shifting dynamics of Nigeria’s economy, with services emerging as the primary engine of growth.
The services sector’s strong performance was fueled by key economic activities, including crop production (23.42%), trade (15.11%), telecommunications (14.40%), real estate (5.88%), financial institutions (5.76%), and crude petroleum (4.60%). These activities collectively contributed to the sector’s dominance and reinforced its critical role in sustaining economic momentum.
Implications for Nigeria’s Economy
The 3.84% GDP growth in Q4 2024 reflects Nigeria’s resilience amid global economic challenges and domestic structural reforms. The sustained expansion of the services sector signals a gradual shift toward a more diversified economy, reducing reliance on traditional sectors like agriculture and crude oil. This diversification is crucial for long-term economic stability and job creation, particularly in a country with a rapidly growing population.
However, the slowdown in the agriculture and industry sectors raises concerns about their ability to contribute meaningfully to economic growth. The agriculture sector, which remains a significant employer of labor, faces challenges such as insecurity, climate change, and limited access to modern farming technologies. Similarly, the industry sector’s sluggish growth highlights the need for increased investment in infrastructure, manufacturing, and value-added production to unlock its full potential.
Policy Recommendations and Future Outlook
To sustain and build on the current growth trajectory, policymakers must address the structural bottlenecks hindering the agriculture and industry sectors. This includes improving security for farmers, enhancing access to credit and technology, and investing in critical infrastructure such as roads, power, and ports. Additionally, the government should continue to implement reforms that promote ease of doing business, attract foreign investment, and foster innovation in the services sector.
The NBS data also underscores the importance of leveraging Nigeria’s digital economy, particularly the telecommunications sector, which has emerged as a key driver of growth. With the right policies and investments, Nigeria can harness the potential of its digital economy to create jobs, boost productivity, and drive inclusive growth.
Nigeria’s 3.84% GDP growth in Q4 2024 reflects a resilient economy with significant potential for further expansion. While the services sector continues to lead the way, addressing the challenges facing agriculture and industry will be critical to achieving sustainable and inclusive growth. As the government implements reforms and invests in key sectors, Nigeria is well-positioned to unlock its economic potential and improve the livelihoods of its citizens. The latest GDP figures serve as a reminder of the opportunities and challenges that lie ahead in shaping the future of Africa’s largest economy.
