Experts fear tougher times for citizens as oil sector worsens Nigeria's low GDP growth rate

Economic experts fear tougher times as challenges in the oil sector threaten Nigeria's gross domestic product (GDP) record.

Indeed, the growth rate for the third quarter of 2022 decreased by 1.78% compared to the growth rate of 4.03% recorded in the third quarter of 2021 and by 1.29%, compared to 3.54 % in the second quarter of 2022.

This is also the case with Nigeria's income profile which declined in October, according to the report of the Federation Accounts Allocation Committee.

FAAC data indicates that value added tax (VAT) and corporate income tax (CIT) have increased significantly, while oil and gas royalties, petroleum profits tax ( TPP) and import duties have been significantly reduced. However, excise duties have increased slightly.

The National Bureau of Statistics (NBS) said Nigeria's GDP grew by 2.25% in the third quarter of 2022 on an annual basis, the slowest growth rate since the pandemic of COVID-19 of 2020.

DAILY POST learned this Thursday during the third quarter 2022 Nigerian gross domestic product report released in Abuja.

Looking forward, the growth rate fell to 4.03% in the third quarter of 2021.

Similarly, the critical sector has declined; for example, the oil sector recorded 11.94% compared to the 2021 figure; The ICT sector recorded 15.35%, a decline of 18.44% added in the second quarter of 2022.

Growth in the non-oil sectors increased by 4.27%, 0.50% less than in the second quarter of 2022. The slow growth is attributable to the base effects of the recession and economic conditions difficulties that have hampered productive activities.

In nominal terms, aggregate GDP stood at N52.26 trillion in the quarter under review, representing a growth of 15.83% from the N45.11 trillion recorded in the quarter. corresponding period of 2021. The growth in the third quarter of 2022 is higher than that of 15.03% and 15.41% recorded in Q2 2022 and Q3 2021, respectively.

Oil industry

In the oil sector, the drop in productivity appears to have reflected challenges to the fortunes of GDP records, with the industry registering -22.67% (year-on-year) in the third quarter of 2022, indicating a decline of 11.94% one hundred points compared to the rate recorded in the corresponding quarter of 2021.

Furthermore, the growth rate decreased by 10.91% compared to the contraction of 11.77% recorded in the previous period.

The oil sector contributed 5.66% to total real GDP in the third quarter of 2022, down from the figures recorded in the corresponding period of 2021 and the previous quarter, when it contributed respectively to 7.49% and 6.33%.

In the third quarter of 2022, Nigeria recorded an average daily oil production of 1.20 million barrels per day (mbpd), lower than the average daily production of 1.57mbd recorded in the same quarter of 2021 by 0, 37mbj. It is also lower than the 1.43 Mbps recorded in the previous quarter.

Non-oil sector

In contrast, the non-oil sector grew by 4.27% in real terms during the reference quarter (Q3 2022). This rate was 1.18 percentage points lower than the rate recorded in the same quarter of 2021 and 0.50 percentage points lower than the second quarter of 2022.

Growth in the non-oil sector was mainly driven by information and communication (telecommunications), trade, transport (road transport), finance and insurance (financial institutions), agriculture (production vegetable). and real estate, which represents positive GDP growth.

In terms of contribution to GDP, the non-oil sector contributed 94.34% to total GDP, an increase from the 93.67% recorded in the previous sector, while the oil sector contributed 5.66% to aggregate real GDP for the period.

Mining sector

The Nigerian mining sector has suffered a decline in economic productivity, leading to a decline in growth of -21.31% in the third quarter of 2022.

This was revealed in the third quarter GDP report released earlier today by the National Bureau of Statistics (NBS).

The contribution of the mining and quarrying sector to GDP fell to 5.90% in Q3 2022. This figure is 10.75% and 10.21% lower, respectively, compared to the figures for Q3 2021 and Q3 2022. Q2 2022.

“Quarter-on-quarter, the recorded growth rate was -0.63%. The contribution of extractive industries to real GDP during the quarter under review stood at 5.90%, which is lower than the rate of 7.66% recorded in the corresponding quarter of 2021 and lower than the 6.51% recorded in second quarter of 2022," the report said.

The Mining & Quarrying segment includes Crude Oil & Natural Gas, Coal Mining, Metal Ores & Quarrying and Other Minerals sub-activities. The NBS said the industry experienced nominal growth of 34.26% (year-on-year)...