Nigeria records flat Q3 growth as oil sector contraction slows

ABUJA, Nov 24 (Reuters) – Nigeria’s economy recorded flat growth in the third quarter, data showed on Friday, as the oil sector contracted at a slower pace while the impact of government reforms aimed at boosting output were yet to take effect.

Africa’s largest economy grew by 2.54%, up from the 2.51% posted in the second quarter, but far from President Bola Tinubu’s ambition to expand the economy by at least 6% a year, which he promised during his inauguration in May.

Tinubu has vowed to lift barriers to investment, create jobs and tackle insecurity. He has embarked on Nigeria’s boldest reforms in decades to try to boost output, which has been sluggish for about a decade. But they have yet to impact growth.

“The performance of the GDP in the third quarter of 2023 was driven mainly by the services sector, which recorded a growth of 3.99% and contributed 52.7% to the aggregate GDP,” the National Bureau of Statistics (NBS) said.

Nigeria’s dominant oil sector, which accounts for the bulk of government revenue and 90% of foreign-exchange reserves, contracted 0.85% in the third quarter, a rise of 12.6% from the second quarter when the sector shrank by 13.43%.

Daily average oil output (NGOIL=ECI) stood at 1.45 million barrels per day (mbpd) in the three months to September, up from the 1.20 mbpd in the same period last year.

Tinubu in May scrapped a costly but popular petrol subsidy and lifted currency controls, which he said was to save the country from going under.

But his actions have worsened inflation currently in double-digits, fuelling anger and frustration for a population grappling with a cost of living crisis. Tinubu has been under pressure from unions to offer relief to workers.

He has travelled from Asia, Europe, Middle East and United States to promote investments to try to revive the economy rather than relying on borrowing.

The NBS said the agriculture and industrial sectors, which create jobs, contributed less to GDP in the third quarter of 2023, compared with the same quarter a year ago.

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