Nigeria’s economic growth fell to 2.74% in 2023 from 3.10% in 2022, representing the slowest expansion since 2020, according to data from the National Bureau of Statistics released Thursday. The decline was driven by underperformance in key sectors like manufacturing and agriculture.
Manufacturing growth slid to 1.40% in 2023 versus 2.45% in 2022. Similarly, agriculture grew by only 1.13% last year, down from 1.88% in 2022. The oil sector continued its struggles, contracting by 2.22% in 2023 compared to a 19.22% plunge in 2022, despite marginal gains in daily production volumes.
On the flipside, the services sector was a bright spot, although its performance also softened. Services growth came in at 3.98% in Q4 2023.
Nigeria fell short of growth projections by institutions like the World Bank (2.9%), the IMF (3.2%), and the African Development Bank (3.1%). Uncertainty around elections and worsening insecurity were cited as culprits behind the sluggish momentum.
Experts say more trouble likely lies ahead if oil production does not ramp up, given how heavily Africa’s largest economy still relies on crude exports. High production costs and imported inflation from global headwinds like the Russia-Ukraine war are also posing stiff economic challenges.
“There is likely danger ahead if Nigeria fails to boost oil output,” said Professor Perekunah Eregha of Pan-Atlantic University. The situation may prompt the government and central bank to pursue more stimulative monetary and fiscal policies to reinvigorate domestic industries.