Five largest sectors of the Nigerian Economy H1, 2023

 

Five largest sectors of the Nigerian Economy H1, 2023

 

In the first half of 2023, Nigeria’s dominant sectors collectively contributed N75.22 trillion, comprising 72.8% of the total non-oil sector input, marking a modest 1.6% increase compared to 2022 year-end figures of 71.2%.

 

This growth was primarily steered by the manufacturing sector, showing a 1.3% uptick, reaching 15.1%, along with a robust 3.4% rise in the information and communication sector, now at 14%, up from 10.6%. Construction also played a role, growing by 1.4% to reach 10.7% from 9.4%.

 

Conversely, agriculture faced a notable 3.7% dip, declining from 24.1% to 20.4%, while the trade sector witnessed a marginal 0.8% reduction to reach 12.5% from 13.3%.

 

Agriculture lead all other sectors, it remained the leading contributor to Nigeria’s nominal real GDP, despite its reduction, followed by manufacturing, information & communication, trade, and construction.

Top 5 Sectors and Their Contributions

In this report, we delve into Nigeria’s Top 5 Sectors and their contributions to H1 2023 nominal GDP

 

Agriculture – 20.4%:

The Agricultural sector, while still a dominant force, experienced a notable decline in H1 2023. It contributed N21.04 trillion, constituting 20.4% of the N103.35 trillion non-oil GDP for the period, marking a 3.8% drop from its 24.1% contribution in YE 2022 to 20.4%.

 

Within this sector, crop production played a pivotal role, accounting for N18.41 trillion or 87.5% of the total N21.04 trillion contribution in H1 2023, with this figure representing 43.1% of the N42.68 trillion generated from crop production in YE 2022.

Other subsectors made their mark as well, with livestock contributing N1.17 trillion (5.5%), forestry N196.33 billion (0.9%), and fishing N1.27 trillion (6%) to H1 2023’s agricultural GDP.

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These figures also demonstrate varying levels of contribution when compared to YE 2022 data – livestock – 44.6% of N2.62 trillion, forestry – 56.3% of N196.33 billion and fishing 55.3% of N2.3 trillion.

 

Manufacturing – 15.1%:

In H1 2023, manufacturing emerged as the second-largest contributor to the non-oil sector’s nominal GDP, marking a 1.3% growth from YE 2022. It bolstered the economy with a total contribution of N15.63 trillion.

 

The Nigerian manufacturing landscape comprises 12 distinct sub-sectors, with some clear leaders. Notably, cement manufacturing, food and beverages, tobacco, textile, apparel, and footwear production stood out, collectively constituting a substantial 75.4% of the total value.

 

Food, beverages, and tobacco took the lead during H1 2023, contributing a significant 36.3% to the manufacturing value, amounting to N5.68 trillion.

 

This remarkable performance represented 60.7% of the total value generated in YE 2022, which stood at N9.36 trillion.

 

Following closely, the cement manufacturing subsector contributed N3.35 trillion (21.4%), with a notable share of 53.5% from the N6.26 trillion at YE 2022.

 

Textile, apparel, and footwear made a substantial impact as well, contributing N2.76 trillion (17.7%) to the total manufacturing value and 51.2% of the total value generated for YE 2022, which stood at N5.4 trillion.

 

Although other sub-sectors collectively made up 24.6% of the total manufacturing value during H1 2023, it’s noteworthy that all of them, except for oil refining, contributed over 50% of their sub-sector’s total value in YE 2022.

 

Information and Communication – 14%:

The information and communication sector in Nigeria showed remarkable so far during H1 2023, currently surpassing YE 2022 performance. The sector witnessed substantial growth, surging by 3.4% and contributing 14% to the nominal GDP, totaling N14.51 trillion. This represents 68.6% of the sector’s total contribution in YE 2022 of N21.15 trillion.

 

The telecommunications and information services sub-sector remained the driving force, contributing a commanding 83.4% to the sector’s overall performance. This substantial contribution amounted to N12.1 trillion, representing 72.1% of the total value generated in YE 2022, which stood at N16.78 trillion.

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Other noteworthy sub-sectors collectively contributed 16.6% to the sector’s overall growth. Broadcasting played a pivotal role, contributing 11.1% (N1.61 trillion), which represented 58% of its YE 2022 performance of N2.75 trillion.

 

Motion pictures, sound recording, and music production contributed 5.4% (N777.23 billion), accounting for 49% of its value generated in YE 2022 of N1.59 trillion. Publishing contributed a minor 0.1% (N19.39 billion), representing 51.3% of its value generated in YE 2022 of N37.77 billion.

 

Trade – 12.5%:

Nigeria’s trade sector, of the major contributors to the Nigerian economic landscape, contributed a substantial N12.95 trillion to the nation’s nominal GDP during H1 2023, accounting for 12.5% of the total contribution. While still a significant figure, this reflects a modest 0.8% decline compared to its YE 2022 contribution of 13.3%.

 

H1 2023 trade activities represented 48.7% of the total value of N26.61 trillion generated in YE 2022. Importantly, Nigeria’s H1 2023 trade balance revealed total imports of N11.29 trillion and exports totalling N13.5 trillion, resulting in a balance of payments surplus of N2.22 trillion.

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Examining the composition of exports, a substantial 79.5% amounting to N10.73 trillion represented crude oil exports, with the remaining 20.5% totaling N2.77 trillion attributed to non-crude oil exports. Notably, non-oil exports amounted to N1.34 trillion, constituting 48.4% of this category and contributing 9.9% to the overall export volume during H1 2023.

 

Construction – 10.7%:

Nigeria’s construction sector continues to be a pivotal player in the nation’s economic landscape, contributing 10.7%, equivalent to N11.1 trillion, during the first half of 2023. This growth represents a notable increase of 1.4% compared to its 9.4% contribution at YE 2022, amounting to 59.3% of the total value generated, which stood at N18.7 trillion during YE 2022.

 

An in-depth analysis of data from the National Bureau of Statistics (NBS) reveals a significant upsurge in the construction sector, with a current average growth rate of 39.49%. This substantial increase stands in stark contrast to the 12.72% average growth rate recorded during YE 2022.

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This impressive growth can be attributed, in part, to the persistent inflationary pressures, with an H1 2023 inflation rate of 22.79%, which continues to rise, reaching 25.8% in August 2023. These economic dynamics underscore the significance of the construction sector in Nigeria’s ever-evolving economic landscape.

 

Other Contributors

Apart from the sectors detailed earlier, the mining and quarrying sector played a significant role, contributing 6.7% to Nigeria’s economy in the first half of 2023, whilst the remaining sectors contributed the balance 20.6% of the total value.

 

This contribution stands in contrast to the situation in YE 2022 when it was accompanied by real estate, contributing 6.8% and 5.1%, respectively, with all other sectors combining to make up the remaining 16.8%.