Nigeria: GDP growth softens in Q1 2023
The Nigerian economy started 2023 on a weaker footing. Economic growth waned to 2.3% year on year in the first quarter, slowing from the 3.5% expansion tallied in the final quarter of 2022. The deceleration chiefly reflected the fallout from the cash crunch in Q1, most notably in February and March.
Growth in the non-oil sector of the economy softened to 2.8% year on year in Q1 (Q4 2022: +4.4% yoy), explaining the smaller GDP increase. The slowdown chiefly reflected a 0.9% year-on-year decline in the agricultural sector, swinging from the previous quarter’s 2.0% annual growth. Meanwhile, growth in the services sector weakened (Q1 2023: +4.3% yoy; Q4 2022: +5.7% yoy). Despite the cooling, the sector’s contribution to overall growth was a larger 57.3% in Q1, up from the previous quarter’s 56.3%. In addition, the industrial sector returned to growth, posting a 0.3% annual increase (Q4: -0.9% yoy).
The oil sector, meanwhile, contracted at a markedly softer pace of 4.2% year on year in Q1 (Q4 2022: -13.4% yoy). Oil production rose to 1.51 million barrels per day (mbpd) in Q1, from 1.34 mbpd in the previous three months.