Financial experts and economists have informed President Bola Ahmed Tinubu that Nigeria’s 3.19 percent growth in Gross Domestic Product (GDP) for the second quarter of 2024 does not accurately represent the living conditions of its citizens.
This statement follows the National Bureau of Statistics’ announcement on Monday, which revealed that the services sector propelled Nigeria’s economy to achieve two consecutive quarters of 3.19 percent GDP growth, an increase from the 2.98 percent recorded in the previous quarter. This growth rate also surpasses the 2.51 percent noted in the same quarter of 2023.
According to the NBS data, the industrial and services sectors contributed significantly to the overall GDP in the second quarter of 2024 compared to the same period in 2023, with the services sector alone accounting for 58.76 percent of the total GDP. Further analysis indicated that the non-oil sector contributed 94.30 percent in real terms to the nation’s GDP, while the oil sector contributed 5.70 percent in Q2 2024.
Despite this GDP growth, economists are questioning why the increase in economic activity has not translated into improved living conditions for Nigerians. This sentiment aligns with a recent statement from Ngozi Okonjo-Iweala, Director General of the World Trade Organization and former Finance Minister of Nigeria, who noted that the country’s economic situation has been in decline since 2014, despite steady GDP growth.
Additionally, the NBS reported in July that inflation had decreased to 33.40 percent from 34.19 percent in June 2024. However, the prices of goods and services remain high for most Nigerians, despite various policy interventions by President Tinubu’s administration.
In an interview with Daily Post, Prof. Segun Ajibola, a prominent economist and former President of the Chartered Institute of Bankers, stated that Nigeria’s macroeconomic indicators have yet to positively impact the living conditions of its citizens. He emphasized that GDP growth must connect with microeconomic factors to effect real change.
He urged the government to focus on bridging the gap between macroeconomic indicators like GDP and microeconomic factors such as household income and consumption. He stressed the importance of a comprehensive approach that encompasses the primary (agriculture, mining), secondary (manufacturing), and tertiary (services) sectors to foster balanced and integrated growth that can lead to genuine development.
“The reality is that macroeconomic variables may not significantly improve the living conditions of the populace unless they are effectively communicated to the masses struggling to make ends meet,” he explained. “The improved growth rate is encouraging, but we must work on the mechanisms that connect macroeconomic performance with the everyday realities of households to avoid falling into the trap of growth without development, which many developing nations face.”
Gbolade Idakolo, a financial analyst and CEO of SD & D Capital Management, expressed skepticism about the latest GDP growth, stating that it does not indicate that the economy is recovering. He argued that the reported figures do not align with the actual economic situation.
“The NBS GDP figures are inconsistent with reality, much like the reported decline in inflation. The statistical data does not account for the declining productivity in the economy,” he said. “Many businesses are shutting down, downsizing, or relocating due to the challenging economic environment. The Central Bank of Nigeria continues to raise interest rates, while the Naira depreciates against the US dollar.”
Idakolo called for the government to revitalize the economy through policies that enhance the capacity of small and medium enterprises, large businesses, and the manufacturing sector. He emphasized the need to implement the promised single-digit interest rate loan facility and support for the agricultural sector. “The GDP figures do not indicate that the economy is recovering. The government should compare NBS data with independent sources for a clearer picture of economic performance,” he added.
Prof. Godwin Oyedokun from Lead City University in Ibadan noted that growth rates may vary across different regions of Nigeria. “To gain a more comprehensive understanding of the factors driving growth in the industrial sector, it would be beneficial to analyze regional variations, sector-specific data, and conduct business surveys to uncover the experiences, challenges, and expectations of businesses in the industrial sector,” he suggested. “A more in-depth analysis could help identify the specific factors contributing to industrial growth and assess its sustainability amid ongoing challenges,” he said
