NESC Gives Reasons For Sustained Oil Sector Growth

The Nigerian Economic Summit Group (NESG) has taken a review of recent economic developments in the country, proffering reasons for sustained oil sector growth.

The NESG review which was based on Quarter Two performances said  the non-oil sector expanded by 2.8 percent in 2024Q2, the same growth recorded in 2024Q1.

Attributing this sustained growth in the oil to improvement in domestic crude oil production and global oil prices, it said average domestic crude oil production rose to 1.4 million barrels per day (mbpd) in 2024Q2 from 1.2mbpd in 2023Q2.

On the other hand, global oil prices increased by 8.7 percent (year-on-year) in 2024Q2.

On the economy generally, NESG said: “The Nigerian economy grew by 3.19 percent in 2024Q2, representing a fast pace of expansion compared to the growth of 2.98 percent in 2024Q1, respectively.

The country posted a cumulative growth of 3.1 percent in the first half of 2024.

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On a quarterly basis, the real Gross Domestic Product (GDP) grew marginally by 0.04 percent in 2024Q2 compared with a contraction of 16.1 percent in 2024Q1.

According to the commission, the oil and non-oil sectors contributed to the overall growth, but growth in the former outpaced that of the latter.

The oil sector grew faster by 10.2 percent in 2024Q2 than 5.7 percent in 2024Q1.

Conversely, the non-oil sector expanded by 2.8 percent in 2024Q2, the same growth recorded in 2024Q1.

“However, the economic growth in the quarter was largely driven by the Services sector (with a growth of 3.8 percent), followed by Industry (3.5 percent) and Agriculture (1.4 percent).

Away from sustained oil sector growth, the commission submitted that perennial insecurity challenges continued to slow down the crop production sub-sector.

The sector, it said grew by 1.65 percent in 2024Q1 relative to 1.82 percent and 1.71 percent in 2023Q2 and 2024Q1, respectively.

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“This suggests that unless proactive steps are taken to curtail insecurity in the food-producing regions, food inflation is likely to resume its upward trend going forward.

“The Industrial sector received a boost from the sustained growth recorded by the crude petroleum and natural gas sub-sector. Meanwhile, in 2024Q2, key activity sectors, including Manufacturing and Construction, continued to struggle with growth at 1.3 percent and 1.1 percent, respectively”.