According to the data published by the National Bureau of Statistics (NBS) today, the Nigerian economy expanded in real term by 3.5% y/y in Q3:2024, outpacing our base case projection for the period by 0.34ppt. On a q/q basis, real growth culminated at 10.0% (fastest since 12.0% in Q4:2023), aided in part by low base period effect (q/q real growth came in at a muted 3bps in Q2).
From a structural perspective, the real GDP growth was jointly driven by sturdy expansion in both the oil and non-oil segments. Precisely, the oil economy expanded for the third consecutive quarter since the pandemic by 5.2% y/y, though the momentum trailed Q1 and Q2:2024 performances of 5.7% and 10.2%, respectively.
We note that the average daily crude oil output also improved modestly in Q3 to 1.47mbpd compared to 1.41mbpd in Q2. Notwithstanding, the crude oil output level remains significantly short of the 1.78mbpd baseline set in the 2024 budget, and the 13-quarter peak of 1.57mbpd achieved in Q1:2024.
From a sectoral perspective, the services sector remains the leading driver of the overall economy growth, up 5.2% y/y compared to 3.8% in Q2:2024. Trailing, the industries and agriculture sector growth culminated at 2.2% and 1.1% sequentially, down from 3.5% and 1.4% in Q2:2024. We flag that the slowdown in the agricultural sector growth underscores the currently elevated food inflation rate (Oct 2024: 39.2%).
Likewise, we linked the slowdown in industries sector growth momentum to the reverberating effect of the increase in energy goods prices (PMS price rose from ₦750.00/litre in Q2 to ₦1,060/litre in Q3) and further pressure on the FX rate in the quarter – the NAFEM and parallel market rates fell by 2.4% and 10.4% in Q3 to ₦1,541.94/$ and ₦1,680.00/$ respectively.
