Road transport ranks high in Q3 2022 GDP

Nigeria’s road transport sector has emerged as one of the best-performing sectors in the third quarter of 2022, with a 49.68 percent growth according to recent GDP data by the National Bureau of Statistics (NBS). The sector’s performance towers above the general economic growth of 2.25 percent (year-on-year) in real terms, representing a 1.78 per cent decline compared to the 4.03 per cent growth recorded in Q3 2021.

According to FBNQuest Capital Research, road transportation benefited the most from the decrease in domestic air traffic caused by the rapid increase in flight tickets, which nearly tripled year on year.

“Road transportation mostly benefited from the reduction in domestic air traffic due to the sharp increase in air fares which have almost doubled year-on-year,” the report stated.

According to the NBS data, compared to the decline of 37.90 recorded in the previous quarter, the rail sector still had a decline of 29.91 percent in Q3 2022.

Air transport recorded a decrease of 35.1 percent, from 22.45 percent recorded in Q2, to 14.58 recorded in Q3 2022. Water transport recorded 14.58 percent in Q3 2022, an increase of 545 percent from 3.02 percent recorded in the previous quarter.

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The transportation and storage sector was once again the top performer. In real terms, the Transportation and Storage sector grew by 41.59 percent in Q3 2022. This rate represents an increase of 20.99 per cent relative to the same quarter of the previous year and a decrease of 10.07 percent points relative to the preceding quarter.

Quarter-on-Quarter, this was a decline of 19.87 percent. The contribution of the sector to real GDP in the Q3 of 2022 was 1.34 percent, a rise from 0.97 percent recorded in the preceding year but lower than 1.84 percent recorded in the second quarter of 2022.

The contribution of the sector to real GDP in the Q2 2022 totalled 1.84 percent, a rise from 1.26 percent recorded in the preceding year and higher than 1.10 percent recorded in the first quarter of 2022.

The sector grew by 39.64 percent in nominal terms in the third quarter of 2022 year-on-year. This rate was lower relative to the figure of 41.61 percent recorded for the corresponding quarter of 2021 and lower than 53.83 percent in the previous quarter.

Five of the six sub-activities under the Transport and Storage industry recorded positive growth rates in the third quarter of 2022. Quarter-on-Quarter growth recorded a decline of 21.57 percent.

Transport activities contributed 1.89 percent to Nominal GDP in Q3 2022, an increase from the 1.57 percent recorded in the corresponding period of 2021, and lower than the 2.79 percent recorded in the second quarter of 2022. According to the NBS, the average price of diesel also known as automotive gas oil (AGO) has risen by more than 200 percent over last year, as the global energy crisis persists, impacting the transport industry.