from OKORO CHINEDU in Lagos, Nigeria
LAGOS, (CAJ News) – THE telecommunications sector has underlined its vitality to Nigeria’s economic growth.
This as the oil industry, for years the mainstay of Africa’s biggest economy, declines further.
The National Bureau of Statistics’ (NBS’) national accounts for the third quarter of 2022 (Q3 ’22) indicate that gross domestic product (GDP) grew by 2,3 percent year-on-year compared with the 3,5 percent y/y recorded in Q2 ’22.
Coronation Merchant Bank noted that meanwhile, on a quarter-to-quarter basis, it grew by 9,7 percent, reflecting increased economic activity compared with the q/q contraction of 0,4 percent recorded in the preceding quarter.
Chinwe Egwim, Chief Economist at Coronations, noted the yearly moderation in growth could be partly attributed to base effects and the trickle-down effect of the of the Russia-Ukraine crisis impacting the prices of deregulated petroleum products.
The economist mentioned this impact on select manufacturing inputs, and the effect of recent monetary policy rate hikes.
The telecommunications sector posted growth of 10,1 percent y/y compared with 7,7 percent y/y recorded in the previous quarter.
It contributed 12,9 percent to total GDP in Q3.
“The segment continues to benefit from growth in subscriptions and increased data usage from existing subscribers,” Egwim said.
Coronation noted the 10 percent data price increase implemented by the telecommunications companies in September 2022 was rolled back by the regulator, the Nigerian Communications Commission.
Nigeria’s population of an estimated 218 million people, the largest in Africa, makes the tech sector lucrative.
The West African country is the biggest producer of crude oil.
The oil economy recorded negative growth for the tenth consecutive quarter, contracting by 22,7 percent y/y in Q3 against 11,8 percent y/y recorded in Q2.
Based on data from the NBS, average crude oil production in Q3 was 1,20mbpd (million barrels per day) compared with 1,43mbpd in the previous quarter and 1,57mbpd in Q3 ’21.
As at end-September, the Organisation of the Petroleum Exporting Countries (OPEC) production quota for Nigeria was 1,8 mbpd.
The revised government oil production benchmark is 1,6 mbpd.
“The sector continues to suffer from production shut-ins as a result of crude oil theft, vandalism, prolonged repairs, low investment and poor infrastructure,” Egwim said.
The non-oil economy grew by 4,3 percent y/y in Q3 ’22 against 4,8 percent y/y in Q2 ’22.
Besides telecoms, key drivers within the non-oil economy include transportation and storage, finance and insurance, construction, trade, real estate and agriculture.
– CAJ News