Nigeria’s economic landscape has witnessed a significant shift, with the Gross Domestic Product (GDP) growth rate slowing to 2.51% in the second quarter of 2023.
This figure, as revealed by the National Bureau of Statistics (NBS), reflects a decline from the 3.54% growth recorded in the same period of the previous year.
The reasons behind this deceleration are multifaceted, largely attributed to the prevailing challenging economic conditions.
Touchaheart Nigeria reports on the details of Nigeria’s GDP performance, sector-wise contributions, and the concerns raised by the Organised Private Sector (OPS) regarding potential job losses.
GDP Performance and Sectoral Contributions
The GDP report published by the NBS offers insights into the factors impacting Nigeria’s economic trajectory.
In the second quarter of 2023, the growth was primarily driven by the Services sector, showcasing a 4.42% growth rate.
This sector played a pivotal role, contributing 58.42% to the overall GDP.
The agriculture sector, a cornerstone of Nigeria’s economy, exhibited a growth rate of 1.50%, indicating an improvement from the previous year’s growth of 1.20%.
However, the industrial sector faced challenges, experiencing a contraction with a growth rate of -1.94%.
While this figure is an improvement from the -2.30% recorded in the same quarter of the previous year, it raises concerns about the overall industrial output.
In terms of their contribution to the GDP, both the agriculture and industrial sectors showed a reduced share in the aggregate GDP for the second quarter of 2023 compared to the previous year.
GDP Growth Comparison and Outlook
When compared to the second quarter of 2022, the aggregate GDP for the second quarter of 2023 stands at N52.1tn in nominal terms.
This marks a significant nominal growth of 15.77%.
The GDP growth rate for the second quarter displays a slight uptick from the preceding quarter, where a growth rate of 2.31% was recorded.
This suggests a nuanced economic recovery process.
OPS Apprehensions and Projected Job Losses
The Organised Private Sector (OPS) has voiced concerns over the potential repercussions of the economic slowdown, particularly in relation to job losses.
With the GDP growth rate decelerating to 2.51%, there is growing apprehension about the employment landscape.
The Manufacturers Association of Nigeria’s CEO Confidence Index has highlighted that manufacturers have been compelled to implement job cuts due to the adverse economic environment.
Furthermore, projections indicate that more job losses could be on the horizon in the coming months, a trend predicted based on the prevailing economic outlook.
The President of the Manufacturers Association of Nigeria, Francis Meshioye, noted that some manufacturers are downsizing, while others are diverting their investments away from the country.
Sector Experts Weigh In
Experts from various sectors have provided insights into the factors contributing to the economic slowdown.
The National Vice Chairman of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, emphasized the connection between GDP contraction and decreased productivity.
He stressed that a decline in GDP often translates to reduced output and, subsequently, diminished productivity.
Musa Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, pointed out that recent economic reforms had unintended adverse impacts on GDP growth.
These unforeseen shocks reverberated across multiple sectors, triggering economic challenges that the nation is still navigating.
What You Should Know
As Nigeria’s GDP growth rate slowed to 2.51% in the second quarter of 2023, concerns have been raised by the Organised Private Sector regarding the potential for job losses.
The dynamics between sectoral contributions and the broader economic outlook reveal a complex narrative.
While the Services sector has shown resilience, the industrial sector’s contraction has raised alarms.
The coming months will likely determine whether the country’s economic trajectory shifts towards recovery or presents further challenges.
