Cash crunch slows GDP growth to 2.31 percent in Q1,2023
Nigeria’s quarterly Gross Domestic Product (GDP) for the first quarter of 2023 fell to 2.31 percent.
This was due to the cash crunch experienced by the economy at the end of 2022 which spilled over to early 2023.
The National Bureau of Statistics (NBS) GDP data for first quarter of 2023 showed that Nigeria’s real Gross Domestic Product (GDP) grew by 2.31 percent (Y-o-Y) in Q1 2023, a dip from the 3.52 percent in Q4 2022 and 3.11 percent in the corresponding period 2022.
A decline, analysts attributed to the adverse effects of the cash crunch experienced during the quarter.
This growth rate, NBS explained declined from 3.11 percent recorded in the first quarter of 2022, and 3.52 percent in the fourth quarter of 2022.
“The reduction in growth is attributed to the adverse effects of the cash crunch experienced during the quarter” the report said.
The performance of the GDP in the first quarter of 2023 was driven mainly by the services sector, which recorded a growth of 4.35 percent and contributed 57.29 percent to the aggregate GDP.
The agricultural sector grew by -0.90 percent, lower than the 3.16 percent growth recorded in the first quarter of 2022.
Although the growth of the industrial sector improved to 0.31 percent relative to -6.81 percent recorded in the first quarter of 2022, agriculture and the industrial sectors contributed less to the aggregate GDP in the quarter under review compared to the first quarter of 2022.
The Oil sector recorded an average daily oil production of 1.51 million barrels per day (mbpd) first quarter 2023, higher than the daily average production of 1.49mbpd recorded in the same quarter of 2022 by 0.01mbpd and higher than the fourth quarter of 2022 production volume of 1.34 mbpd by 0.17mbpd.
The real growth of the oil sector was –4.21 percent (year-on-year) in Q1 2023, indicating an increase of 21.83 percent points relative to the rate recorded in the corresponding quarter of 2022 (-26.04%). Growth increased by 9.18 percent points when compared to Q4 2022 which was –13.38 percent.
On a quarter-on-quarter basis, the oil sector recorded a growth rate of 20.68 percent in Q1 2023.
The Oil sector contributed 6.21 percent to the total real GDP in Q1 2023, down from the figure recorded in the corresponding period of 2022 and up from the preceding quarter, where it contributed 6.63 percent and 4.34 percent respectively.
The non oil sector grew by 2.77 percent in real terms during the reference quarter (Q1 2023). The rate was lower by 3.30 percent points compared to the rate recorded in the same quarter of 2022 and 1.67 percent points lower than the fourth quarter of 2022.
The sector was driven in the first quarter of 2023 mainly by Information and Communication (Telecommunication); Financial and Insurance (Financial Institutions); Trade; Manufacturing (Food, Beverage & Tobacco); Construction; and Transportation & Storage (Road Transport), accounting for positive GDP growth.
In real terms, the non-oil sector contributed 93.79 percent to the nation’s GDP in the first quarter of 2023, higher than the share recorded in the first quarter of 2022 which was 93.37 percent and lower than the fourth quarter of 2022 recorded as 95.66 percent.
Agriculture grew by -0.90% (year-on-year) in real terms, a decrease of 4.06 percentage points from the corresponding period of 2022, and a decrease of 2.95 percentage points from the preceding quarter which recorded a growth rate of 2.05 percent.
It grew on a quarter-on-quarter basis at -30.95 percent, however, the sector contributed 21.66 percent to overall GDP in real terms in Q1 2023, lower than the contribution in the first quarter of 2022 and lower than the fourth quarter of 2022 which stood at 22.36 percent and 26.46 percent respectively.
For manufacturing sector, real GDP growth in the first quarter of 2023 was 1.61 percent (year-on-year), lower than the same quarter of 2022 and lower than the preceding quarter by 4.28 percent points and 1.22 percent points respectively. The growth rate of the sector on a quarter-on-quarter basis stood at 1.63 percent.
The real contribution to GDP in the 2023 first quarter was 10.13 percent lower than the 10.20 percent recorded in the first quarter of 2022 and higher than the 8.40 percent recorded in the fourth quarter of 2022.
