Nigerian economy grows in Q1 2024 as millions face severe hardship

Nigeria’s Gross Domestic Product (GDP) showed positive signs in the first quarter of 2024, expanding by 2.98% year-on-year, the National Bureau of Statistics announced Friday.

This marks an improvement over the 2.31% growth recorded in Q1 2023, but falls short of the 3.46% achieved in the final quarter of 2023.

The NBS points to the strength of the Services sector as a key driver of this growth. The sector, encompassing everything from finance and technology to trade and hospitality, witnessed a significant 4.32% increase in output, contributing 58.04% to the overall GDP.

After a contraction of -0.90% in Q1 2023, the agricultural sector managed a modest turnaround, registering a growth of 0.18% in Q1 2024.

The Industry sector also showed signs of improvement, expanding by 2.19% compared to a sluggish 0.31% in Q1 2023. While not as dramatic as the Services sector’s growth, this uptick indicates a more positive trajectory for manufacturing and industrial activity.

“In the quarter under review, aggregate GDP stood at N58,855,142.27 million in nominal terms,” the NBS said. “This performance is higher when compared to the first quarter of 2023 which recorded aggregate GDP of N51,242,151.21 million, indicating a year-on-year nominal growth of 14.86%.”

Harsh Realities

Despite this headline growth, millions of Nigerians continue to face the harsh realities of a severe economic crisis. Inflation has surged to a 28-year high of 33.67%, squeezing household budgets and eroding purchasing power. The Naira has also fallen dramatically, plummeting from N464 to the US dollar a year ago to a troubling N1500 today at the official market.

These economic woes stem in part from the government’s removal of petrol subsidies and the floating of the Naira, policies intended to stimulate long-term growth but leading to hardship for many Nigerians.

The Central Bank has aggressively raised interest rates by 7.5 percentage points in the last four months, aiming to curb inflation. This has made borrowing more expensive, potentially hindering investment and economic growth.