..As Road Transport Posts Highest Growth In Q2, 2022
Valentine Okafor
Nigeria has posted its 7th consecutive quarterly Gross Domestic Product, GDP growth since her exit from recession in the fourth quarter of 2020.
The 3.54% GDP growth in the second quarter of 2022 saw road transport grew by 56.4%, which represented the highest sectoral growth.
According the Chief Executive Officer, CEO, of the Center For The Promotion Of Private Enterprise, CPPE, Dr. Muda Yusuf, the report reflects the resilience of the Nigerian economy amid extreme macroeconomic challenges, galloping inflation, currency depreciation, foreign exchange illiquidity, high energy cost, heightened insecurity, weakening purchasing power, structural bottlenecks and trade facilitation issues.
Analyzing the report, Yusuf, observed that the real sector of the economy grew marginally as agriculture grew by 1.2%; manufacturing 3%; and construction 4.2%. The service sector growth outperformed the real sector, reflecting the sectoral variabilities in the constraints faced by investors in the economy.
Also, Air transport grew by 22.5%; financial services 20%; ICT 7.71%; trade sector 4.5% and real estate 4.4%. These were the sectors that posted positive growth in the second quarter of this year.
The report released by the National Bureau of Statistics, NBS also listed sectors that experienced contraction in the second quarter of this year.
According the NBS, the highest contraction was in oil refining which was 42%, rail transportation 38%, crude oil and gas 11.8%, metal ores 25.5%, electricity vehicle assemblies 7.8%, electricity and air-conditioning 7%; motion pictures and music 6%, textiles 2.8%. The key drivers of these contractions include the following:
The report showed the continued inactivity of the country’s major refineries, all of which have been posting losses in recent years.
It also stated that the cloud of insecurity hovering over the railway system has caused the suspension of railway services.
Additionally, the Nigerian National Petroleum Company, NNPC, Limited has reported huge crude oil theft and vandalization of oil facilities in the oil producing areas, estimating that the country loses two billion dollars monthly on account of oil theft. Loses are also suffered on account of vandalization of oil facilities, pipelines and the activities of illegal refineries.
Yusuf, also noted that productivity and competitiveness issues continue to impact negatively on the performance across sectors of the economy while the general operating environment continues to be very challenging for most investors.
The Small and Medium Enterprises, SMEs were particularly more vulnerable to prevailing macroeconomic shocks, resulting in high mortality rate of small businesses.
According to the analysis, Notwithstanding the fact that the Nigerian economy has been out of recession since the fourth quarter of 2020, the crude oil and gas, oil refining, textiles, electricity, gas and steam engines are still experiencing recession.