BLOOMBERG
Nigeria’s economy grew less-than-anticipated in the third quarter as painful reforms instituted by President Bola Tinubu weighed on the non-oil sector, which expanded at its slowest pace since 2021.
Gross domestic product expanded 2.54% in the three months through September from a year earlier, compared with growth of 2.51% in the previous quarter, according to data released by the National Bureau of Statistics on Friday. The median estimate of seven economists in a Bloomberg survey was 2.85%.
The softer-than-expected performance will test Tinubu’s commitment to reforms aimed at transforming the economy to woo investment and achieve 6%-plus growth in coming years. The last time Africa’s largest oil producer obtained that rate was in 2014.
Reforms implemented so far include ending costly fuel subsidies and relaxing the country’s complex exchange-rate regime, which led the naira to lose 40% of its value against the dollar and has pushed up the cost of doing business.
The non-oil sector expanded 2.75% from a year earlier, compared with 3.58% in the prior three months — its slowest pace since the first quarter of 2021.
The oil sector continued to be a drag on the economy but to a lesser extent than in previous quarters. It contracted 0.85% as production increased to 1.45 million barrels per day, from 1.2 million barrels per day a year earlier.
Nigeria has been unable to meet its OPEC+ quota this year, partly because of crude oil theft and vandalism. A recovery in the industry is vital for Tinubu to achieve his long-term growth targets.
–With assistance from Simbarashe Gumbo.
©2023 Bloomberg L.P.
