In a welcome development, Nigeria’s oil sector GDP has recorded its first positive growth since the first quarter of 2020, marking a potential turning point for the nation’s economy.
This news comes after several quarters of contraction due to fluctuating oil prices and production challenges.
According to the latest data released by the National Bureau of Statistics (NBS), the oil sector’s GDP grew by 12.11 percent in the fourth quarter of 2023, a significant reversal from the negative growth figures seen since the first quarter of 2020.
Further findings showed crude petroleum GDP skyrocketed from a -0.85 per cent decline in Q3 to a robust 12.11 per cent growth in the fourth quarter of 2024.
The nation in the fourth quarter of 2023 recorded an average daily oil production of 1.55 million barrels per day, higher than the daily average production of 1.34 million barrels per day recorded in the same quarter of 2022 by 0.21 million barrels per day and higher than the third quarter of 2023 production volume of 1.45 million barrels per day by 0.10 million barrels per day.
The oil sector contributed 4.7 per cent to the total real GDP in Q4 2023, up from the figure recorded in the corresponding period of 2022 and down from the preceding quarter, where it contributed 4.3 per cent and 5.5 per cent respectively.
The real growth of the oil sector was 12.1 per cent (year-on-year) in Q4 2023, indicating an increase of 25.5 per cent points relative to the rate recorded in the corresponding quarter of 2022 (-13.4 per cent).
Nigeria, Africa’s largest oil producer, has long relied on crude oil to fuel its economy. However, recent years have seen a decline in global oil prices and production challenges, impacting the nation’s economic growth.
Yet, 2024 could offer a glimmer of hope, with experts suggesting a combination of increased drilling, gas commercialisation, and the incoming Ajaokuta-Kaduna-Kano gas pipeline project, among others, as ways oil can once again jump-start Nigeria’s economic engine.
Cordros Securities Limited, in its 2024 full-year outlook, projected that the economy will remain on a growth trajectory, supported by improvement in the oil sector amid the government’s ongoing efforts to curb pipeline vandalism and oil theft and, gradual recovery from the impact of policy reforms implemented in the prior year, as well as continued resilience in the services sector.
