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Services sector drives 6.21% growth in GDP – NBS

By BusinessNews Staff on July 17, 2014

The National Bureau of Statistics on Tuesday released the Gross Domestic Product for the first quarter of 2014, stating that in real terms, the country’s GDP grew by 6.21 per cent.

In the report, a copy of which was made available to our correspondent, the bureau stated that the 6.21 per cent GDP growth was higher than the 4.55 per cent recorded in the corresponding quarter of 2013, but lower than the 6.77 per cent recorded in the fourth quarter of last year.

According to the NBS, Nigeria’s nominal GDP (at basic prices) for the first quarter of this year was estimated at N20.169tn or N15.43tn in real terms, adding that in the corresponding quarter of 2013, it was estimated at N18.29tn or N14.53tn.

The report stated that while the oil sector recorded a negative real growth rate of 6.60 per cent in the first quarter, indicating a better performance compared to the negative growth of 11.40 per cent recorded in the corresponding period of 2013 and the negative 9.36 per cent growth recorded in the fourth quarter of that year, the non-oil real growth was 8.21 per cent in the opening quarter of 2014.

The 8.21 per cent growth recorded in the non-oil sector in the first quarter represents an increase of 0.76 percentage points from the 7.44 per cent recorded in the corresponding quarter of 2013.

The NBS, however, stated that relative to the fourth quarter of 2013, the non-oil growth was marginally lower by 0.57 percentage points in the first three months of this year.

On sectoral contribution, the report said the services sector accounted for the largest share of real GDP in the first quarter of 2014, amounting to N8.181tn or 52.99 per cent.

The industrial sector, it stated, ranked second with a contribution of N4.22tn or 27.36 per cent, while agriculture constituted the smallest sector in the first quarter, representing N3.03tn or 19.65 per cent of the GDP.

The report also stated that activities in trade, telecommunications, real estate and crop production were the major contributors to the non-oil sector.

For instance, it stated that in real terms, the telecommunications sector contributed N1.27tn or 8.27 per cent to the total GDP in the first quarter of 2014, marginally lower than the contribution in the first quarter of 2013 by 0.14 percentage points.

For the real estate sector, the report said, “Real estate represented 6.82 per cent of the real GDP in the opening quarter of 2014, exhibiting a notable 1.55 per cent point decline from the 8.37 per cent that it represented in the preceding quarter, yet only a marginal 0.20 per cent point decline from that of the corresponding quarter of 2013.

“Despite a positive growth rate of 3.17 per cent, this was 6.96 per cent points lower than the 10.13 per cent growth recorded in quarter four of 2013, representing the sharpest decline in growth in the sector since before 2011.”

For crop production, it explained that the sector was the second highest contributor to the real GDP in the first quarter of this year, with N2.64tn or 17.12 per cent.

On trade, the report stated, “Trade was the largest contributor to the real GDP in Q1 2014. It contributed N2.67tn or 17.35 per cent of the real GDP in the first quarter of 2014, marginally higher than the 17.34 per cent contribution to the GDP recorded in the corresponding quarter of 2013.

“The sector saw strong growth of 6.28 per cent in the opening quarter of 2014, marginally higher than the record for the corresponding quarter of 2013.This was as a result of higher agricultural output, a key input for traders.”

Meanwhile, a report by Renaissance Capital has revealed that the manufacturing sector is still a major driver of economic growth in the country.

According to the report, with the rebased Gross Domestic Product, the manufacturing sector is currently growing faster than the telecommunications, oil and gas and agricultural sectors.

The report, titled, ‘Nigeria’s GDP: Bigger but slower – Manufacturing is the engine of growth’, was released on Monday.

The report strengthens recent figures by the Manufacturing Association of Nigeria, which showed that there was an increase in manufacturing capacity utilisation from the 46.3 per cent recorded in the first half of 2013 to 52.7 per cent in the second half of the year.

Specifically, the Rencap report stated that the manufacturing sector recorded 22 per cent growth in 2013, as against the 14 per cent in 2012, noting that the growth was largely driven by the textile, cement and food sub-sectors, among others.

The growth recorded by the manufacturing sector within the period, it said, accounted for one third of the total growth in the economy.

The report stated, “Manufacturing is growing strongly, despite power deficit. The manufacturing sector is a much bigger, faster-growing sector under the new series (nine per cent of the GDP as against the four per cent previously). In 2013, it recorded substantial growth of 22 per cent (as against 14 per cent in 2012), comprising one-third of total growth. Food, beverage and tobacco producers account for half of the manufacturing sector. The sub-sector’s growth accelerated to 12 per cent in 2013, against seven per cent in 2012.

“An analysis of the growth drivers shows that the telecoms sector is a maturing and slower-growing sector. The growth sectors are manufacturing (particularly food, cement and textile producers) and real estate.”

The report further stated that the cement sub-sector, which accounts for about one per cent of the country’s GDP, recorded phenomenal growth in 2013, as it posted 39 per cent growth as against the 14 per cent recorded in 2012.

It stated, “Several of the smaller manufacturing sub-sectors are growing even faster than food producers. Cement, which only comprises one per cent of the GDP, grew by a sizeable 39 per cent in 2013, up from a strong 14 per cent in 2012.

“Nigeria’s large population of upwardly mobile consumers, particularly in the South-West, coupled with investments in power, implies the strong growth of manufacturers, including food producers and breweries, is sustainable.”

Conversely, the report noted that in 2013, the oil and gas sector experienced a decline in growth as it contracted by 13 per cent, while trade and real estate sectors overtook agricultural and financial services to emerge as the top three growth drivers of the Nigerian economy.

[Punch]

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