Finance and Insurance Sector Grows by 21.37% in Q1

The Finance and Insurance Sector grew by 21.37% in the first quarter of 2023, according to the latest report from the National Bureau of Statistics (NBS).

The report shows that the figure is lower by 1.86% points from the rate recorded in the 2022 first quarter and higher by 9.76% points from the rate recorded in the preceding quarter. Quarter-on-quarter growth in real terms, however, stood at 14.20%.

The contribution of Finance and Insurance to real GDP totaled 5.35%, higher than the contribution of 4.51% recorded in the first quarter of 2022 by 0.84% points, and higher than 3.95% recorded in Q4 2022 by 1.40% points.

Notably, the Finance and Insurance Sector consists of two subsectors, Financial Institutions and Insurance, in which the former accounted for 91.75% and the latter 8.25% of the sector respectively in real terms in Q1 2023.

The sector grew at 22.37% in nominal terms (year-on-year), with the growth rate of Financial Institutions at 25.99% and -7.25% growth rate recorded for Insurance.

The total rate was 0.21% points lower than the previous quarter and 9.91% points lower than Q1 2022. Growth from one quarter to the next was 12.55%. The sector’s contribution to the nominal GDP increased to 4.11% in Q1 2023 from 3.80% the year prior and 3.30% the quarter before, representing an increase of both percentage points.

According to the GDP overview, Nigeria’s Gross Domestic Product (GDP) increased in real terms by 2.31% (year over year) in the first quarter of 2023. This growth rate decreased from the 3.11% first quarter of 2022 and the 3.52% fourth quarter of 2022 records.

The detrimental consequences of the cash shortage faced throughout the quarter are blamed for the decline in growth. The Services sector, which had growth of 4.35% and contributed 57.29% to the total GDP, was the primary driver of the GDP’s performance in the first quarter of 2023.

Agriculture experienced growth of -0.90%, which was less than the 3.16% growth seen in the first quarter of 2022. Agriculture and the industry sectors had less contribution to the overall GDP in the quarter under review compared to the first quarter of 2022, despite the industrial sector’s growth improving to 0.31% relative to – 6.81% reported in the first quarter of 2022.