Amanze Chinonye
Nigeria’s economic growth accelerated to 4.43% in the second quarter, its strongest quarterly expansion in five years, but the improvement needs to translate into more jobs, investment and higher household incomes, the Centre for the Promotion of Private Enterprise said on Tuesday.
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Real gross domestic product growth rose from 3.89% in the first quarter and 4.23% a year earlier, according to official data cited by CPPE.
The expansion was supported by stronger oil production and growth across agriculture, mining, construction, refining, financial services, trade and other activities, CPPE Chief Executive Officer Muda Yusuf said in a statement.
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The oil sector grew 7.31% in the second quarter, compared with 2.57% in the previous quarter, as average crude production rose to 1.72 million barrels per day from 1.55 million bpd.
Non-oil growth also strengthened to 4.31% from 3.94%, while services, which accounted for 56.62% of real GDP, expanded 4.60%.
The figures provide further evidence that Africa’s most populous country is gaining momentum after a period of economic adjustment marked by high inflation, currency pressures and elevated business costs.
CPPE said improved foreign-exchange stability, higher oil output and stronger investor confidence were supporting the recovery and urged the government to maintain its broad reform direction.
It warned that abrupt policy changes could weaken business confidence and undermine recent gains in macroeconomic stability.
Growth was relatively broad-based in the second quarter. Agriculture expanded 4.39%, up from 3.15% in the first quarter, while mining and quarrying grew 6.37%, compared with 1.89%.
Construction rose 6.75%, financial and insurance services expanded 9.29% and real estate grew 3.76%.
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Domestic refining was among the fastest-growing activities, expanding 43.94% after 37.46% growth in the first quarter. Cement production increased 12.75%, while chemicals and pharmaceuticals grew 7.70%.
Information and communications technology remained a major growth driver, expanding 9.62%, with telecommunications rising 10.38%.
Manufacturing growth was more subdued, easing to 3.24% from 3.29% in the first quarter.
CPPE said manufacturers continued to face high energy, financing and logistics costs, limiting the pace at which the sector could expand.
Transport and storage grew 5.70%, down from 7.41% in the first quarter, while road transport expanded 5.82%.
Electricity, gas and steam remained a weak spot, contracting 10.63%, although the decline was smaller than the 15.30% contraction recorded in the first quarter.
CPPE said restoring reliable electricity should be a priority because high power costs weigh on manufacturers, farmers and other businesses. It called for faster investment in generation, transmission and distribution and action to address gas supply and liquidity constraints in the electricity market.
The group also urged greater investment in productive sectors, particularly agriculture and manufacturing, saying lower-cost long-term finance and predictable tax, tariff and trade policies would help businesses expand and create jobs.
It called for continued investment in roads, rail and ports to reduce logistics costs and improve the movement of goods from production centres to domestic and export markets.
Financial services growth of 9.29% offered an opportunity to channel more capital into manufacturing, agriculture, mining and small businesses, CPPE said.
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The group said lower inflation could eventually create room for an orderly reduction in interest rates, while credit guarantees and other financing instruments could help address the shortage of long-term capital.
The key test for the recovery will be whether stronger output feeds through to households and businesses, CPPE said.
It called for targeted social protection and employment programmes to cushion vulnerable households while the recovery takes hold, alongside temporary support for viable small businesses.
CPPE also proposed an inclusive-growth dashboard to accompany quarterly GDP data, tracking employment, real wages, poverty, MSME performance, manufacturing output, agricultural yields and private investment.
The organisation said sustained reforms and greater investment in productive sectors could help Nigeria raise economic growth towards 6%-7% over time.
For now, it said, the latest GDP figures provided grounds for cautious optimism, but the recovery would need to become more employment-intensive and broadly shared to produce a meaningful improvement in living standards.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
