The contribution of non-oil sectors of the economy to Nigeria’s GDP growth in 2015 strengthens the case for diversification of the economy away from oil as data released by the Nigerian Bureau of Statistics (NBS) shows that the telecommunications sector contributed 8.88 percent to GDP in the final quarter of 2015.
This translates to N 1,645,82 billion, a figure that is a slight increase relative to the 8.76% contribution recorded in the same quarter of the previous year.
“This contribution is higher than the contribution of 7.71% recorded in the third quarter, but this is to a large extent due to different seasonal patterns of the telecommunications sector and whole economy,” stated the NBS statement.
Year on year growth rate recorded in the fourth quarter of 2015 was 3.49%, higher than the growth rate of 2.48% recorded in the same quarter of 2014.
Data so far released by the NBS indicates that Nigeria’s GDP grew by 2.79 percent in 2015 with agriculture contributing 23.11 percent on the back of a growth of 3.72 percent.
Analysts attribute the growth in the agricultural sector to the far reaching reforms by administration of former President Goodluck Jonathan that revolutionised the method of distribution of fertilizer and seedlings directly to local farmers through the use of their mobile phones.
The services sector continued on the positive showing growing 4.78 percent to contribute 53.18 percent to the entire GDP in 2015.
The industries performed poorly as their contribution to the economy fell by 2.24 percent resulting in a contribution of 23.71 percent to the entire GDP in 2015.
Nigeria’s non oil sector grew by 3.83 percent while oil sector fell by 5.45 percent in 2015.
This trend economists say should make the strongest case for a diversification of the Nigerian economy away from oil.
“The diversification of the Nigerian economy is long overdue, as continued reliance on crude oil exports makes Nigerian economy vulnerable to shocks. This time, we will be more deliberate” said Muhammadu Buhari, Nigeria’s President on his recent trip to China.
Analysts say only the political will is lacking. “The true test of government’s diversification claim is for it to diversify away from oil itself,” said a source at a recent economic forum.
Diversification of the economy was the focus of a recent National Economic Forum where stakeholders provided suggestions on how the government can diversify the economy.
“Agro-allied manufacturing should be the focus, as market-entry strategy, on adding value to local crops, like cashew and tomato, by processing them into finished products, for the local market, and the export market to earn foreign exchange,” said Remi Ogunmefun, Director-General, Manufacturers Association of Nigeria (MAN)
The share of telecommunications in real GDP tends to fluctuate over the course of the year, due to different seasonal patterns, but nevertheless annual averages declined every year between 2010 and 2014.
In 2015 this trend was reversed; in each quarter the growth rate in the telecommunications sector was higher than for the economy as whole. As a result, the proportion of total annual GDP accounted for by telecommunications increased in 2015.
ISAAC ANYAOGU
