Nigeria’s oil sector GDP has expanded for the first time since the first quarter of 2020, which is a positive development and could be a turning point for the country’s economy.
This announcement follows multiple quarters of decline brought on by unstable oil prices and difficulties with production.
The oil sector’s GDP expanded by 12.11 percent in the fourth quarter of 2023, according to the most recent data issued by the National Bureau of Statistics (NBS). This represents a major reversal from the negative growth figures observed since the first quarter of 2020.
Additional research revealed that the GDP of crude petroleum soared from a -0.85% decline in Q3 to a strong 12.1% gain in Q4 of 2024.
The country produced 1.55 million barrels of oil on average per day in the fourth quarter of 2023, which is 0.55 million barrels per day more than the 1.34 million barrels per day average in the same quarter of 2022 and 0.10 million barrels more than the 1.45 million barrels per day production volume in the third quarter of 2023.
In Q42023, the oil industry’s share of the real GDP was 4.7%, which is a decrease from Q2022, when it was 5.5%, and an increase from the next quarter, when it was 4.3% and 5.5%, respectively.
In Q4 2023, the oil sector’s real growth was 12.1% (year over year), which represents a 25.5 percentage point increase over the rate observed in the equivalent quarter of 2022 (-13.4%).
The greatest oil producer in Africa, Nigeria, has historically depended on crude oil to power its economy. However, the country’s economic growth has been impacted by a drop in global oil prices as well as production issues in recent years.
However, 2024 may hold some promise, as analysts point to several strategies—including more drilling, the commercialization of gas, and the upcoming Ajaokuta-Kaduna-Kano gas pipeline project—that could help oil revitalize Nigeria’s economy.
In its 2024 full-year outlook, Cordros Securities Limited predicted that the economy would continue to grow, helped by improvements in the oil sector despite the government’s ongoing efforts to reduce pipeline vandalism and oil theft, a gradual recovery from the effects of the previous year’s policy reforms, and resilience in the services sector.
