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Adanna Nnamani
The financial and insurance sub-sectors of Nigeria’s services sector achieved a significant growth of 30.83% in the second quarter of 2024.
According to CBN Economic Report for Third Quarter of 2024, the figure is compared with 28.79 and 28.21 per cent in the preceding and corresponding quarters of 2023, respectively.
The data also showed that the Services sector as a whole expanded by 5.19% in Q3 2024, up from 3.79% in Q2 2024, maintaining its position as the largest contributor to Nigeria’s Gross Domestic Product (GDP) with a share of 53.58%.
The apex bank said performance is driven by key factors such as the recapitalisation exercise, rising interest rates, as well as increased consultancy fees and ATM/transfer charges. The ongoing digital transformation of Nigeria’s financial services, including the rise of fintech, mobile banking, and digital payment platforms, also played a crucial role. These developments, the CBN, said helped stimulate economic activity across related sub-sectors, including the Information and Communications Technology (ICT) sector, which grew by 5.92%, contributing 0.95 percentage points to overall GDP growth.
The ICT sub-sector performance was further bolstered by strong demand for digital services such as e-commerce and data/internet services, which in turn supported growth in other sectors like trade (0.65%) and real estate (0.68%).
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In other sectors, the transport and storage sub-sector showed notable improvement, growing by 12.15% in Q3 2024, a sharp recovery from contractions in the previous two quarters.
This growth was attributed to improved security conditions, increased investment in road infrastructure, and the adoption of alternative energy sources (like CNG) in road transport, which provided a substitute for higher airfares.
The agriculture sector, while still showing positive growth, saw a slower pace of expansion, increasing by just 1.14% in Q3 2024 compared to 1.41% in the previous quarter.
Growth in this sector, according to the CBN, was primarily driven by favourable weather conditions and better harvests of staples. However, the fishing sub-sector contracted by 1.91%, reflecting challenges in the sector.
Meanwhile, the industrial sector also remained in positive territory, growing by 2.18% in Q3 2024. This was down from 3.53% growth in Q2 2024 but still marked a recovery from the modest performance of the previous year. A significant contributor to this growth was an increase in crude oil production, which rose to 1.33 million barrels per day (mbpd) in Q3 2024, up from 1.27 mbpd in Q2 2024. This boost was attributed to improved security in oil-producing regions.
Despite positive performance in oil production, the mining and quarrying sub-sectors saw a sharp decline, contracting by 61.36%, reflecting continued challenges in quarrying and coal mining. However, metal ore-related activities showed some signs of improvement.
“This reflected the continued poor performance of quarrying & other minerals and coal mining despite modest improvements in metal ores-related activities.” the bank said.
