Nigeria’s economy continued its gradual recovery in the third quarter of the year, growing by 3.98% compared to the same period last year, according to newly released government data. Although this represents a slight slowdown from the 4.23% growth recorded in the previous quarter, the figures reflect continued momentum in several non-oil sectors, particularly services, agriculture, and industry, despite persistent inflationary pressures and tight monetary conditions.
The latest data, published by the National Bureau of Statistics (NBS), shows that economic activity between July and September remained resilient in the face of rising living costs, high borrowing rates, and ongoing structural challenges. While oil production showed signs of improvement, it was once again the non-oil sectors that contributed the most to overall growth, underlining Nigeria’s gradual shift away from deep reliance on crude oil revenues.
Earlier this year, Nigeria rebased its Gross Domestic Product (GDP) calculations to better reflect changes in the structure of the economy. This statistical update, completed in July, revised previous estimates by incorporating new industries, changing consumption patterns, and improved data collection methods. As a result, the economy was recorded as growing by 3.13% in the first quarter of the year. The updated figures are designed to provide a more accurate representation of Africa’s most populous nation and its rapidly evolving economic landscape.
In the third quarter, the oil sector grew by 5.84% year-on-year. This improvement was largely supported by higher crude oil output, which averaged 1.64 million barrels per day during the period — an increase from 1.47 million barrels per day in the same quarter of the previous year. The rise in production is seen as a positive development, especially after years of disruption caused by pipeline vandalism, crude oil theft, and underinvestment in infrastructure.
However, despite this increase in oil output, the petroleum sector’s overall contribution to GDP dropped to just 3.44%. This decline in share reflects the growing importance of non-oil industries and highlights a shifting pattern in Nigeria’s economy. Once heavily dependent on crude exports, the country is now seeing greater contributions from services such as telecommunications, financial services, information technology, trade, and transport, as well as agricultural activities and manufacturing.
The non-oil sector expanded by 3.91% in the third quarter. Within this, the services sector stood out, recording growth of 4.15% as demand for digital services, banking, retail trade, entertainment, and communication continued to rise. Nigeria’s youthful population, growing urban centres, and expanding mobile and internet usage have supported steady growth in these service-based industries.
Agriculture, another critical part of Nigeria’s economy and a major source of employment, recorded a growth rate of 3.77%. Farming, fishing, and livestock production continue to support millions of Nigerians, although the sector remains vulnerable to challenges such as high transportation costs, insecurity in some rural regions, climate-related disruptions, and rising fertiliser prices. Even with these obstacles, agricultural output still contributed significantly to the country’s overall economic performance.
Industrial production, including manufacturing, construction, and mining, also recorded moderate expansion during the quarter. However, analysts note that manufacturers are still facing difficulties due to unreliable electricity supply, high energy costs, foreign exchange shortages, and increased costs of imported raw materials. These factors continue to limit the full potential of Nigeria’s industrial base.
Economic experts and international partners have acknowledged the Nigerian government’s recent policy reforms, especially in areas such as exchange rate management, subsidy removal, and fiscal restructuring. In October, the World Bank said Nigeria had made some progress in stabilising its economy. However, it also warned that more action is needed to ensure that the benefits of growth are felt by ordinary citizens, many of whom continue to struggle with the rising cost of food and basic necessities.
Inflation remains a major concern for households and businesses. As of October, the inflation rate stood at approximately 16.05%, significantly increasing the cost of living. In response, the Central Bank of Nigeria has maintained a tight monetary policy stance, keeping its main interest rate at a high level of 27% in an effort to control inflation and stabilise the national currency. While these measures may help reduce inflation in the long term, they have also made borrowing more expensive and slowed down investment in the short term.
Looking ahead, economic projections remain cautiously optimistic. The World Bank estimates that Nigeria’s economy could grow by around 4.2% in 2025, rising to 4.4% by 2027 if current reforms continue and structural challenges are addressed. Future growth is expected to be driven mainly by services, agriculture, and other non-oil industries rather than crude oil exports.
Economists agree that for Nigeria to achieve sustainable growth, it must continue investing in infrastructure, power generation, education, technology, and security while creating policies that encourage both local and foreign investment. Reducing dependence on oil, supporting small and medium-sized businesses, and ensuring stable food production will also be critical.
For now, the latest GDP figures suggest that Nigeria’s economy is slowly building resilience, powered largely by sectors outside of oil. While challenges remain, the country’s diverse economic base provides hope that with consistent policy direction and strategic investment, stronger and more inclusive growth could be achieved in the years ahead.
Source:Africa Publicity
