Services still the primary driver of growth

From the national accounts for Q4 2018 we highlight the best performing sectors among those accounting for at least 1% of GDP at constant basic prices. The tertiary (services) sector again posted the best performance with growth of 2.9% y/y after 2.6% the previous quarter. The primary sector (agriculture) grew by 2.5% y/y from 1.9%. The secondary sector achieved just 0.9% y/y, constrained by the weak performance of oil and gas. Nigeria is a services economy on the basis that the tertiary sector accounted for 54% of output in Q4 2018.

  • For the second consecutive quarter, information and communications emerged as the best performer with a growth rate of 13.2% y/y. Data from the industry regulator show that in Q4 mobile data subscriptions grew by 18.5% y/y (and 4.6% q/q).
  • Although the transportation and storage sector achieved healthy real growth of 9.5% y/y, its double-digit growth streak of four quarters has been disrupted. Its largest segment, road transport, was the primary driver of growth for the sector. There has been visible traction with transport infrastructure projects under the FGN. However, the sector represented just 1.4% of GDP in Q4, which compares with 7.0% in South Africa and 8.0% in Kenya in 2017.
  • Top performing sectors (% chg; y/y)

    Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  • Manufacturing also features on the list of top performers. The sector grew by 2.4% y/y, compared with 1.9% in Q3. This gentle acceleration is consistent with our manufacturing PMI reports for the period, and allows a little optimism for household demand.
  • The food and beverages segment posted growth of 2.2% y/y, a slowdown from 2.9% in Q3, and accounted for 45% of total manufacturing GDP.
  • Agriculture grew by 2.5% y/y, compared with 1.9% recorded in Q3. Crop production was the major driver; this segment accounts for 90% of agriculture GDP and grew by 2.5 y/y. The pick-up could be linked to activities around harvest.

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