Research coy predicts higher 2.7% GDP growth for Nigeria in 2022

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Lagos, Nov. 30, 2022 – United Capital Research, a Nigerian research firm, has predicted a 2.7 GDP growth rate for Nigeria in 2022.

The research firm gave this projection in its economic outlook for the year, a copy of which was made available to the Global Business News in Lagos on Wednesday.

It also predicted that the last quarter of 2022 will record a GDP growth rate of 2.0 percent, describing the 2.3 percent real GDP recorded in the third quarter of 2022 as the eighth consecutive high GDP growth rate recorded by Nigeria since the end of COVID-19.

“Looking ahead to the last quarter, we retain upbeat expectations for the Nigerian economy.

“Although our forecasts see further slowdown in economic growth, we expect the economy to close the year strong,” it said.

The research company projected that the information and communication sector will continue to be at the forefront of the growth.

It listed the gradual spread of 5G technology, growing internet penetration, rising data and voice traffic and the impact of electioneering on broadcasting growth as some of the factors for the projected growth in ICT sector.

United Capital Research also predicted  that agriculture would be another positive influence on economic growth in the last quarter of 2022, albeit at a slower pace than in the third quarter.

It described the Nigerian economy as resilient in spite of the global economic environment.

It said that the economic expansion in Q3-2022 was despite the continued headwinds in the global economic environment, including persistent global and domestic inflationary pressures, higher importation costs (due to extended disruption in the global supply chain), natural disasters, and geopolitical uncertainties. 

“The real GDP expansion recorded in Q3-2022 makes it the eighth consecutive quarter of growth in the aftermath of the economic recession during the peak of the coronavirus pandemic, indicating the economy’s resilience in the post-covid era. 

“As expected, the non-oil sector continued to drive GDP growth in Q3-2022, with sectors such as Agriculture (+1.3% y/y), Construction (+5.5% y/y), Trade (+5.1% y/y), Information & Communication (+10.5% y/y), Accommodation & Food Services (+6.7% y/y) and Real Estate (+4.6% y/y) experiencing real growth, offsetting drags from contracting sectors such as Mining & Quarrying (-21.3% y/y), Electricity, Gas, Steam & Air Condition Supply (-3.7% y/y) and Manufacturing (-1.9% y/y). 

“Notably, of the nineteen (19) sectors in the NBS’s classification, fifteen (15) expanded while four (4) contracted.”

United Capital said that the oil and gas sector continued to underperform the broader economy in Q3-2022 as the crude oil petroleum and Natural Gas sector contracted further. 

“In Q3-2022, the oil sector fell 22.7%, broadly due to weaker crude production during the period. 

The contraction in Q3-2022 extends the sector’s woes into the 10th consecutive quarter. In addition, the persistent weakness in the sector has meant its contribution to overall economic activities has continued to pale

The non-oil sector continues to be the key driver of the nation’s growth since the start of the post-covid economic recovery. 

“In Q3-22, the non-oil sector expanded by 4.3% y/y in real terms, underperforming its Q3-2021 growth rate of 5.4% y/y and its Q2-2022 growth rate of 4.8% y/y as signs of slowing growth persists.

“The slower performance observed in Q3-2022 is mainly attributable weaker growth in Agriculture (+1.3% y/y), and contraction in the Manufacturing sector (-1.9% y/y).

The manufacturing sector contracted by 1.9% y/y in Q3-2022, 620bps lower than the 4.3% y/y growth recorded in Q3-2021

The decline was primarily driven by contraction in the Food, Beverage, and Tobacco sub-sector. (GBN)

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