Q4 2024 GDP report exposes economic weaknesses, imbalance –Expert

By Chinelo Obogo

The recently released Q4 GDP figures by the National Bureau of Statistics, which show quarter-on-quarter GDP growth at 3.84 per cent and year-on-year growth at 3.40 per cent, have come under scrutiny by experts.

In an analysis of the data, which was released on Wednesday by NBS, financial expert Kalu Aja said these figures show economic resilience despite persistent double-digit inflation. He warned, however, that a deeper examination of the figures reveals structural weaknesses in the Nigerian economy where critical sectors are stagnating.

Aja, who made the observation on his X handle, said that, for instance, three key sectors, which are agriculture (25 per cent), trade (13 per cent), and IT/telecommunications (17 per cent), account for more than half of Nigeria’s GDP growth. These sectors, particularly agriculture, are also the largest employers in the country.

However, the concerning aspect, according to Aja, is that these major economy contributors are experiencing very sluggish and alarmingly low growth rates. Agriculture contributes 25 per cent to the GDP but has a 1.76 per cent growth rate, while trade contributes 13 per cent with 1.19 per cent growth, and IT/Telco contributes 17 per cent but with 5 per cent growth.

Meanwhile, the fastest-growing sectors make very small contributions to the overall economy. The finance and insurance sector is growing at an impressive 27 per cent but contributes only 6 per cent to the GDP. Similarly, the water supply, sewerage, waste management and remediation sector is growing at 8 per cent but contributes a mere 0.18 per cent to real GDP.

“If agriculture grew at the same rate as finance, Nigeria’s GDP could hit 8 per cent. But these sectors are crawling, not booming,” Aja said.

With Nigeria’s population growth rate nearing 3 per cent, Aja suggests that any GDP growth below 4 per cent is insufficient. He poses a strategic question for government policy: whether to focus on boosting the major GDP contributors or further developing the fast-growing sectors.