Nigeria’s Economy Soars: 5 Key Drivers Behind Q3 2024’s 3.46% GDP Growth
Published: November 26, 2024
Table of Contents
Overview of Q3 2024 Growth
The National Bureau of Statistics (NBS) confirmed that Nigeria’s economy recorded a year-on-year GDP expansion of 3.46% in Q3, up from 3.19% in Q2 and 2.54% in the same period last year. This reflects the country’s strongest quarterly growth in over a year.
President Bola Tinubu welcomed the report as evidence that his economic reforms are taking effect and emphasized his administration’s commitment to delivering improvements directly to citizens’ livelihoods.
1. Agriculture Leads Growth
Agriculture remained the largest contributor to Nigeria’s GDP in Q3 2024, accounting for an impressive 28.65% of total economic output. This dominant role highlights the sector’s resilience and vital importance in driving economic recovery, employment, and food security.
A key component of this growth was the notable surge in crop production, especially staples such as maize, rice, cassava, and yam. This increase was largely attributed to a combination of government-led initiatives and private sector investment. The Ministry of Agriculture expanded its fertilizer subsidy program, making essential inputs more affordable for smallholder farmers. Additionally, the National Agricultural Development Fund (NADF) improved distribution logistics, ensuring timely access to seeds and fertilizers even in remote regions.
Security improvements in previously unstable rural areas—particularly in the Middle Belt and North-West—allowed farmers to return to their lands during critical planting seasons. Reduced troop disruptions and strengthened rural policing enabled safer harvest cycles, especially in conflict-prone farming communities.
Moreover, the government continued to invest in rural infrastructure projects, such as feeder roads and irrigation systems, under the “Green Backbone Initiative.” These efforts reduced post-harvest losses, increased access to markets, and encouraged youth participation in agribusiness.
The Central Bank of Nigeria’s Anchor Borrowers’ Programme (ABP) also played a pivotal role by offering low-interest credit to over 250,000 farmers in Q3 alone. The program helped boost productivity and encouraged cooperative farming, particularly in rice and sorghum value chains.
As a result of these multi-faceted interventions, not only did agricultural output rise, but food inflation also stabilized slightly, offering relief to millions of Nigerian households. Experts believe that if current trends continue, agriculture could catalyze Nigeria’s broader push toward inclusive and sustainable growth, especially as the country seeks to diversify away from oil dependency.
2. ICT Strengthens Digital Economy
The ICT sector delivered strong performance, contributing 16.35% to GDP. Growth in telecommunication, mobile penetration, and digital platforms supported exponential expansion, reinforcing the sector’s position as a pivot for digital economic transformation.
3. Trade Sectors Bolster Output
Trade services continued to be a cornerstone of Nigeria’s economic activity, contributing a significant 14.78% to the nation’s GDP in the third quarter of 2024. This performance reinforces the pivotal role of commerce—both formal and informal—in sustaining household incomes, employment, and broader market liquidity.
One of the key drivers behind this robust performance was the expansion of domestic commerce, especially in urban and peri-urban centers like Lagos, Abuja, Kano, and Port Harcourt. Retail markets experienced higher turnover, supported by a shift in consumer behavior toward inflation-hedging strategies. Households increasingly prioritized bulk purchases, local substitutes, and essential goods, which kept demand resilient despite rising costs.
The informal sector, which employs over 80% of Nigeria’s labor force, played an equally vital role. Informal trade thrived particularly in street vending, open markets, transportation-based selling, and mobile hawking. Government efforts to digitize tax collection in these sectors also allowed for better data collection and regulatory inclusion, without stifling grassroots activity.
In parallel, e-commerce platforms and mobile payment systems continued to see rapid adoption. Platforms like Jumia, Paystack, and Flutterwave helped thousands of micro-traders and SMEs reach broader audiences across state lines. This digital inclusion helped cushion the impact of macroeconomic pressures, enabling trade continuity in both goods and services.
Additionally, increased investment in cross-border trade infrastructure through the African Continental Free Trade Area (AfCFTA) framework began to show early gains. Improved customs processes and corridor linkages at borders with Niger, Benin, and Cameroon allowed smoother movement of goods, further enhancing trade volume.
Government support through initiatives such as the MarketMoni micro-credit scheme also helped small traders remain active by providing accessible financing options with minimal collateral requirements.
As Nigeria continues to diversify its economy away from oil dependency, the resilience and flexibility of the trade sector make it a key pillar for achieving inclusive, people-driven growth.
4. Manufacturing Rebounds
Manufacturing’s share reached 8.21% of GDP, underpinned by increased factory activity and investments in localized production, especially in agro-processing and textiles.
5. Oil Sector Edge
While oil accounted for just 5.57% of GDP, output increased to 1.47 million barrels per day, signaling stabilization in production.
Non-Oil Momentum: A Pillar of Recovery
Non-oil sectors collectively contributed a robust 94.43% to GDP growth, underscoring Nigeria’s gradual move from oil dependence. The service sector alone expanded by 5.19%, contributing over half of total economic output.
Year-on-Year and Quarter Trends
Nigeria’s real GDP reached ₦20.12 trillion in Q3, up from ₦18.29 trillion in Q2 and ₦19.44 trillion year-on-year. Nominal GDP also rose, reaching ₦71.13 trillion in current price terms—a 17.3% jump from Q3 2023.
Tinubu’s Message to Nigerians
President Tinubu emphasized that the Q3 growth is evidence reforms are working, but acknowledged more work remains. “We won’t rest until Nigerians feel the positive impacts in their pockets,” he stated, reinforcing the promise of a US $1 trillion GDP by 2030.
Challenges & Reform Gaps
Despite the progress, key sectors like manufacturing and agriculture grew modestly, highlighting structural challenges. Experts say high interest rates, energy costs, and exchange rate volatility are holding back more vibrant growth.
Unemployment Trends and Labour Outlook
Although officially higher in Q2, unemployment remains a concern. Expansion in informal employment—over 90% of workforce—suggests underemployment persists despite GDP growth.
What Lies Ahead?
The economy rebasing scheduled for early 2025 is expected to expand measured GDP dramatically, including digital and creative sectors. Projects like the Lagos deep-sea port and tax reforms may further support inclusive growth and fiscal sustainability.
For deeper economic insights, visit our Nigeria Economy Analysis hub or follow updates on Reuters Africa.
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