Nigerian economy surpasses expectations

Nigeria’s gross domestic product grew by 3.46% in the third quarter, surpassing expectations as its services sector expanded at its fastest pace in nearly two years.

The data represents a reprieve for President Bola Tinubu, who has struggled to stabilize the country’s economy after cutting government fuel subsidies many Nigerians had relied on. Tinubu said he welcomed the report, adding that more work would be needed for Nigerians to “feel the positive impacts in their pockets and experience a better living standard.”

Surging fuel prices have added to already-high inflation, sparking mass protests. They have also forced thousands to find other ways to move around: More than 100,000 cars that formerly ran on gasoline have been converted to run on natural gas.

Sources:  The Financial Times, Bloomberg

One World Bank economist recently wrote in the Financial Times that Nigeria “just might be on the cusp of turning its economic fortunes around,” arguing that Tinubu’s sweeping economic measures, while not perfect, “must be allowed to succeed.” The reprioritization around non-oil sources of growth like the telecommunications and financial services industries indicated an “expanding, more stable economic base and a potential divergence away from Nigeria’s reliance on oil,” an economist at Oxford Economics wrote in a research note, adding however that “oil production is expected to remain a cornerstone of the West African economy.” Tinubu’s 2025 budget, to be presented on Wednesday, includes increased crude output and a price of $75 a barrel, which could boost growth further, Bloomberg wrote.

Sources:  The Associated Press, Africanews

Nigeria is increasingly turning to natural gas — the country has the continent’s largest reserves — to power vehicles in the absence of affordable petrol, The Associated Press reported. The move could, eventually, lower transportation costs by almost 50%, authorities said, following the country’s worst cost-of-living crisis in a generation sparked by high petrol prices. But just 13 of Nigeria’s 36 states have natural gas filling stations, and many people have been forced to walk to work. While the government emphasized the long-term environmental benefits, scaling up natural gas in the short term will require significant infrastructure investment and public awareness, Africanews wrote.