Nigeria’s Financial Sector Made Significant Contribution to The GDP, Surged by 26.5% to Reach N3.8 trillion in 2023

According to data released by the National Bureau of Statistics (NBS), Nigeria’s financial service sector made a significant contribution to the country’s Gross Domestic Product (GDP) in 2023, reaching N3.8 trillion. 

This represents a Year-on-Year (YoY) increase of 26.5% from N3.01 trillion reported in 2022.

The breakdown of the NBS numbers reveals that financial institutions accounted for 91.99% of the overall N3.8 trillion.

Further analysis shows that financial institutions contributed N3.5 trillion in 2023, marking a 28.86% increase from N2.722 trillion in 2022. Additionally, the insurance sector contributed N305.02 billion in 2023, representing a growth of 4.82% from N290.98 billion in 2022.

Despite macroeconomic challenges, the financial service sector made unprecedented strides in contributing to the economy in 2023. Notable highlights included significant growth in Fintech, foreign exchange unification, and lending to the real sector.

Analysts emphasize the crucial roles played by the banking and insurance sectors in Nigeria’s economy, citing their support in lending to the real sector, job creation, and facilitating transactions nationwide.

Mr. David Adnori, Vice President of Highcap Securities Limited, highlighted that banks declared impressive earnings in the first nine months of 2023, largely attributed to the Federal Government’s foreign exchange policy.

Recently, the Central Bank of Nigeria (CBN) revealed that banks’ credit to the economy rose by 49.77 percent Year-on-Year (YoY) to N62.52 trillion in December 2023 from N41.74trillion reported in the corresponding period of 2022.

Data from the CBN’s Money and Credit Statistics showed that credit to the private sector stood at N62.52 trillion for the month of December, second to the highest recorded last year, with October recording the highest with N63.57 trillion.

The upward trend, analysts posited, suggested sustained confidence in the economy. The consistent climb reflected a robust financial environment and an expanding private sector.

Meanwhile, the report by NBS revealed that Nigeria’s GDP growth has remained in positive territory in recent quarters despite the enormous challenges facing the nation amid various policy reforms and implementations.