Telecoms, Agriculture are Major Drivers of Economic Growth, Oil Sector Shrinks

The little growth recorded in the third quarter of this year was driven largely by the telecommunications and agriculture sectors, among others.
The telecommunications and post sector alone grew by 24.42 percent, the highest in the period. The nation’s Gross Domestic Product (GDP) much publicized growth was only 6.81 percent, though higher than the preceding two quarters.
Analysis of the sectoral growth rate in the third quarter of 2013 by FSDH Research shows that supply disruptions continues to hamper output in the oil sector, while non-oil sector output increased. The growth in the non-oil sector was driven by growth in activities recorded in the Agriculture, hotels and restaurants, building and construction, and telecommunications sectors. Other sectors that recorded impressive growth rate are finance and insurance, real estate services, manufacturing and solid minerals, amongst others.
The Telecommunication and Post sector recorded the highest real GDP growth rate of 24.42 percent, followed by Building and Construction: 14.31 percent; Hotel and Restaurant: 13.66 percent; Solid Minerals: 12.67 percent; Real Estate: 10.35 percent; Business & Other Services: 9.20 percent; Wholesale & Retail Trade: 9.03 percent; Manufacturing: 8.16 percent; Agriculture: 5.08 percent; Finance & Insurance: 4.15 percent; and Others: 5.10 percent.
However, Crude Petroleum contracted by 0.53 percent in the third quarter of 2013. According to the NBS, the Nigerian oil sector continued to be hampered by supply disruptions; however, the restoration of about 400,000 barrel per day production during the period in 2013 improved the contribution of the sector.
Agricultural output continues to enjoy improved production in 2013. The sector grew by 5.08 percent in the third quarter of 2013, up from 4.52 percent in second quarter of 2013, and up from 3.89ercent in the corresponding period of 2012. The growth in 2013 represents the highest growth recorded in the agriculture sector in eight quarters. The growth in the third quarter of 2013 was driven by the recovery from the floods that occurred in the corresponding period of 2012, impacting at least 25 out of the 36 states in Nigeria. Crop production and fishing in particular, showed improvements due to proactive attempts by the Federal Government through the Federal Ministry of Agriculture. The finance and Insurance sub-sector grew by 4.15 percent during the period in 2013, as economic participants looking to be more active engage financial intermediaries for support and mediation.
The nominal GDP for the third quarter of 2013 was estimated at N11.17 trillion, an increase of 1.81 percent from N10.97 trillion recorded in the corresponding quarter of 2012. Oil nominal GDP accounted for 32.72 percent, while non-oil nominal GDP contributed 67.28 percent. Looking at the breakdown of the non-oil sector, Agriculture accounts for 37.37 percent; Wholesale & Retail Trade: 15.22 percent; while others contributed 14.69 percent. The NBS noted that crude oil continues to play a dominant role in the Nigerian economy. The average daily production stood at 2.26mb/d in Q3 2013, compared with 2.11mb/d recorded in Q2 2012.
The GDP growth rate of 6.81 percent during the period in 2013 was higher than 6.48 percent in the first quarter of 2012. The average GDP growth rate for the last seven quarters is 6.54 percent. The highest growth rate during the period was 6.99 percent in the fourth quarter of 2012, while the lowest is 6.18 percent recorded in the second quarter of 2013.
FSDH Research notes that the on-going reforms in the agriculture, power (electricity), as well as infrastructure build-up would help to increase the economic growth rate of the economy.
“We implore all relevant stakeholders in the economy, to continue to make efforts to ensure the creation of more conducive economic and business environment to improve the well-being of Nigerians”, it said.

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