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Nigeria’s Economic Growth Surprises as Oil Sector Slump Ends - BLOOMBERG

FEBRUARY 22, 2024
  • GDP expanded 3.46% in fourth quarter; analysts expected 2.4%
  • Oil sector snapped more than three years of contraction

  • BY  Ruth OlurounbiBloomberg News

    Market stall vendors and commuters in Lagos.

    Market stall vendors and commuters in Lagos. , Photographer: Benson Ibeabuchi/Bloomberg

    (Bloomberg) -- Nigeria’s economy grew faster than anticipated in the fourth quarter after the oil sector exited a more than three-year contraction.  

    Gross domestic product expanded an annual 3.46% in the three months through December, compared with growth of 2.54% in the previous quarter, according to data released by the National Bureau of Statistics on Thursday. The median estimate of six economists in a Bloomberg survey was 2.4%. 

    The oil sector grew 12.1% as production increased to 1.55 million barrels per day, from 1.34 million barrels a year earlier. Production has been increasing on a sustainable basis in Africa’s largest crude producer as it addresses security concerns and aging infrastructure, Minister of State for Petroleum Heineken Lokpobiri told Bloomberg Television in Davos last month. For years it has missed its OPEC quotas, which the minister expects will change. He is forecasting output will be above the quota by year-end.

    The non-oil sector expanded 3.07% from a year earlier, compared with 2.75% in the prior three months. 

    The better-than-expected performance is a major boost for Nigerian President Bola Tinubu, who, since taking power in May, has implemented a raft of reforms to woo investment and revive an economy that’s been in decline for almost a decade. Tinubu’s administration is targeting a growth rate of about 3.8% in 2024 and 6% or more in the coming years. The last time it achieved the latter rate was in 2014. 

    Last year Olaniyi Yusuf, chairman of the Nigerian Economic Summit Group, said Tinubu’s growth goal was achievable — if the energy sector steps up.

    Reforms implemented so far include ending costly fuel subsidies, relaxing the exchange-rate regime and overhauling the country’s tax system to lift revenue.  

    Economic growth slowed to 2.7% in 2023 from 3.1% a year earlier. 

    --With assistance from Mark Evans and Anthony Osae-Brown.


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