The oil sector contracted by 10.73 percent year-on-year and contributed just 7.49 percent to the total real Gross Domestic Product (GDP) in the third quarter (Q3) of 2021 in spite of the amount invested in the sector since oil was discovered in Nigeria.
Quarter-on-Quarter, the oil sector grew by 12.05 percent in Q3 2021. The Oil sector contributed 7.49 percent to total real GDP in Q3 2021, down from 8.73 percent recorded in the corresponding period of 2020 and up compared to the 7.42 percent filed in the preceding quarter.
In the third quarter, Nigeria failed to up crude oil production despite oil prices trading at over $80 per barrel. Crude oil production was 1.57 million barrels per day (mbpd) on average, down from 1.67 mbpd achieved in the same quarter of 2020. Another indication that Nigeria is still struggling to up production due to its outdated oil infrastructure and high cost of production.
In the latest report by the National Bureau of Statistics (NBS), the non-oil sector remains the powerhouse of the Nigerian economy, growing at 5.44 percent in real terms in the third quarter and contributing 92.51 percent to the nation’s economy.
Breaking down sectorial performance in the third quarter, services subsector contributed 49.65 percent to real GDP while industries and agriculture added 20.41 percent and 29.94 percent, respectively.
Trade, Telecommunications, Financial Institutions, Manufacturing, Agriculture, and Transportation and Storage all recorded positive growth even with the inflation rate hovering around 16 percent year-on-year during the period.
Despite the tough operating environment and other bottlenecks like an increase in electricity tariffs, import duty, high foreign exchange rate, and drop in consumer spending, the non-oil sector contributed over 92 percent to real growth in the third quarter, suggesting that more investment and a conducive environment would have deepened the sector growth.
Nigeria’s economy grew by 4.03 percent in the third quarter of 2021, slightly slower than the 5.01 percent recorded in the second quarter of the year but authenticate the nation’s resilience post-Covid-19.