The Lagos Chamber of Commerce and Industry (LCCI) has commended the Federal Government’s declaration of a state of emergency on food security, urging a focus on assisting farmers through measures such as providing fertilizers and seeds. The commendation comes following the 2023 Second quarter Economic report released by the National Bureau of Statistics (NBS) recently.
In its report, the National Bureau of Statistics (NBS) indicated that Nigeria’s economy expanded by 2.51% in the second quarter of 2023, up from 2.31% in the first quarter. Despite marking the 11th consecutive quarter of growth, this figure falls short of the 3.54% growth recorded in the same period last year. The reasons behind this slightly subdued growth can be attributed to economic difficulties stemming from fuel subsidy removal and exchange rate harmonization.
The service sector played a crucial role in driving growth, contributing 58.42% to the aggregate Gross Domestic Product (GDP) and expanding by 4.42%. In contrast, the oil sector remained in recession, contracting at a more pronounced rate of –13.43% in the second quarter compared to –4.21% in the previous quarter. The challenges faced by the oil sector include issues of accountability, oil theft, pipeline vandalism, underinvestment, and rising production costs.
The non-oil sector, on the other hand, experienced growth of 3.58%, showing a slight improvement of 0.81% points from 2.77% in the first quarter of 2023. Despite this growth, it remains lower by 1.19% points compared to the same period in 2022. Among the top five contributors to growth were the solid minerals sector (31.9%), finance & insurance (26.8%), utilities (11.0%), information and communication (8.6%), and construction (3.4%). Conversely, the slowest growing sectors included transport & storage (–50.6%), oil & gas (–13.4%), education (1.4%), agriculture (1.5%), and other services (1.7%). The manufacturing sector’s growth remained modest at 2.20%.
The Lagos Chamber of Commerce and Industry (LCCI) offered insight into the economic landscape, noting the substantial contraction in transport and storage and the limited growth in manufacturing and trade. The LCCI attributed these trends to the deregulation of the downstream oil sector, exchange rate fluctuations, and weakened consumer demand. While the agriculture sector’s recovery is noteworthy, growth remains hindered by insecurity and policy gaps. Solid minerals, though showing high growth at 31.9%, remains relatively insignificant due to its smaller size.