May 30, 2024

 Oil, gas sector contracts, as Nigeria GDP growth slows to 2.51% in Q2, 2023

Oredola Adeola

 

The crude oil and natural gas sector contracted to 5.3 percent in the first quarter of 2023(Q1, 23) from 6.1 percent in Q2,23, as Nigeria Gross Domestic Product (GDP)growth slowed to 2.51% in the second quarter from 3.54% a year earlier, this is according to data released by the National Bureau of Statistics (NBS) on Friday.

 

According to NBS, the oil sector, which accounts for two-thirds of the Federal Government’s revenue and 90% of foreign exchange reserves, contributed 5.34 percent to the aggregate gross domestic product.

 

Whereas the non-oil sector contributed 94.66 percent to the aggregate gross domestic product.

 

The sectoral contribution to the real GDP showed that the Service sector contributed 58.42 percent, while Agriculture recorded 23.01% and industries contributed 18.56 %.

 

NBS therefore attributed the slower growth rate to the challenging economic conditions being experienced as a result of hikes in prices of petroleum products and foreign exchange volatility.

 

In the quarter under review, aggregate GDP stood at N52,103,927.13 million in nominal terms. This performance is higher when compared to the second quarter of 2022 which recorded aggregate GDP of N45, 004,520.89 million, indicating a year-on-year nominal growth of 15.77%.

 

CRUDE OIL PERFORMANCE IN Q2,23

 

Nigeria in Q2,23 recorded an average daily oil production of 1.22 million barrels per day (mbpd), lower than the daily average production of 1.43mbpd recorded in the same quarter of 2022 by 0.22mbpd and lower than the first quarter of 2023 production volume of 1.51 mbpd by 0.29mbpd.

 

The real growth of the oil sector was –13.43% (year-on-year) in Q2 2023, indicating a decrease of 1.66%
points relative to the rate recorded in the corresponding quarter of 2022 (-11.77%).

 

The growth also decreased by 9.22% points when compared to Q1 2023 which was –4.21%.

 

On a quarter-on-quarter basis, the oil sector recorded a growth rate of -14.12% in Q2 2023.

 

The Oil sector contributed 5.34% to the total real GDP in Q2 2023, down from the figure recorded in the corresponding period of 2022 and down from the preceding quarter, where it contributed 6.33% and 6.21% respectively.

 

ELECTRICITY, GAS, STEAM, AND AIR CONDITIONING SUPPLY PERFORMANCE IN Q2,23

 

The Electricity, Gas, Steam, and Air conditioning Supply sector recorded a year-on-year growth of
41.61% in the second quarter of 2023.

 

This was 48.58% points higher than the -6.97% growth rate recorded in the corresponding quarter of 2022, and 23.42% points higher than the growth rate of 18.19% recorded in the quarter before. Quarter–on-quarter, the sector recorded a growth rate of 335.67% in Q2 2023.

 

The contribution of Electricity, Gas, Steam, and Air Conditioning Supply to Nominal GDP in the second quarter of 2023 was 1.70%, higher than the contribution made in the corresponding quarter of 2022 at 1.39% and higher than its contribution of 0.40% in the quarter before.

In real terms, the sector grew by 6.10% in Q2 2023, an increase from the growth rate of -11.48% recorded in the same quarter of 2022. When compared to the immediate past quarter, there was a decrease of 3.43% points from 9.53% recorded. On a quarter-on-quarter, the sector grew at a rate of 251.72%.

 

The contribution of this sector to real GDP in the second quarter of 2023 was 0.71%, higher than the 0.69% recorded in Q2 2022. Moreover, the figure in 2023 was higher than the 0.20% recorded in Q1 2023.