Q4 2024 GDP Report Reveals Economic Weaknesses and Imbalance – Expert Analysis

The recently released Q4 2024 GDP figures from the National Bureau of Statistics (NBS) indicate a quarter-on-quarter growth of 3.84% and a year-on-year growth of 3.40%. While the figures reflect economic resilience despite ongoing double-digit inflation, financial expert Kalu Aja points out significant structural weaknesses in the Nigerian economy. A deeper look into the data reveals that critical sectors, such as agriculture, trade, and IT/telecommunications, are showing stagnation despite their major contributions to the country’s GDP.

Aja highlights that these three sectors agriculture (25%), trade (13%), and IT/telecommunications (17%) account for over half of Nigeria’s GDP growth. However, their growth rates are alarmingly low, with agriculture growing at just 1.76%, trade at 1.19%, and IT/telecommunications at 5%. These sectors, which are also the largest employers in the country, are not expanding at a pace that aligns with the country’s demographic and economic needs.

In contrast, smaller sectors are showing impressive growth, but their overall contribution to the GDP is minimal. For example, the finance and insurance sector is growing at 27%, though it contributes only 6% to GDP, while the water supply and waste management sector is growing at 8%, yet contributes just 0.18%. Aja suggests that if the major sectors, particularly agriculture, grew at the same rate as finance, Nigeria’s GDP could reach 8%, pointing to the slow growth in key areas as a missed opportunity for economic expansion.

With Nigeria’s population growth rate nearing 3%, Aja argues that any GDP growth below 4% is inadequate. He questions whether the government should focus on boosting the growth of major sectors, such as agriculture, or continue fostering the rapid expansion of smaller sectors that, despite their impressive growth rates, have limited impact on the economy’s overall performance.

SOURCE: THE SUN