Comercio Partners, an investment bank, has said that achieving a faster Gross Domestic Product (GDP) growth in Nigeria requires strategic interventions, policy support and focus on sustainable growth sectors.
Nnamdi Nwizu, co-founder, Comercio Partners revealed this in an analysis of the GDP report for the third quarter 2023.
He noted that the Q3 GDP growth of 2.54 percent is indicative of a resilient Nigerian economy, demonstrating notable recovery from previous economic challenges.
“The service sector’s standout performance, with a robust 3.99 percent growth, has played a pivotal role in driving overall economic expansion. Despite the oil sector experiencing a slight contraction of -0.85 percent, it remains a crucial contributor, contributing 5.48 percent to the GDP,” he said.
Highlighting areas of concern in the GDP, Nwizu said: “The contraction in the oil sector, albeit modest at -0.85 percent, raises concerns due to its historical significance in Nigeria’s economic landscape.
“The marginal decline in the agricultural sector’s growth to 1.30 percent in Q3 from 1.34 percent 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.
“While the non-oil sector’s growth at 2.75 percent remains positive, the 0.84 percent decrease from Q2 warrants attention. The deceleration is largely attributed to a slowdown in information and communication, finance, and insurance.”
Speaking on the outlook for GDP in the last quarter of the year, Nwizu expressed optimism that the oil sector may experience a more positive outlook in Q4 despite challenges in Q3.
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 positively impact GDP growth.”
Nwizu however noted that consideration of global economic conditions remains paramount, adding that geopolitical events, trade dynamics, and fluctuations in commodity prices can influence Nigeria’s economic outlook.
Consequently, he called for a proactive approach to navigating global uncertainties, stating it 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 and the fiscal year 2023. Continued collaboration between the public and private sectors will contribute to the overall economic vibrancy of the nation, Nwizu said.