By Chinelo Obogo
talktonelo@yahoo.com
Nigeria’s aviation industry has long been a subject of debate regarding its impact on the nation’s Gross Domestic Product (GDP). Over the past decade, the sector’s official contribution has remained relatively modest when measured against the performance of other key industries, despite its vital role in connectivity, trade and economic growth.
Daily Sun’s analysis from data compiled from the National Bureau of Statistics (NBS) from 2013 to 2023 shows that the contribution of the sector to the nation’s GDP is over N1.3 trillion and within this time frame has hovered below 0.5 per cent.
It is, however, important to note that the aviation sector plays a pivotal role in attracting Foreign Direct Investment (FDI), which has continued to grow steadily over the years. FDIs are essential drivers of economic expansion, and a strong, efficient air transport system often determines the volume and ease of investment inflows into any country. This highlights the fact that the significance of Nigeria’s aviation sector extends well beyond its direct contribution to the Gross Domestic Product (GDP).
Aviation sector’s contribution to Nigeria’s GDP from 2013 to 2024
2013: The NBS report from 2018 indicates that the aviation sector contributed NGN 119 billion (0.4 per cent) to Nigeria’s GDP in 2013.
2014: This was a period when the Nigerian economy was undergoing GDP rebasing and this impacted reported economic figures, hence there was no official report from the NBS on the contribution of aviation to the economy. However, according to the International Air Transport Association (IATA), Nigeria’s aviation sector’s direct contribution to its GDP in 2014 was $702.0 million, or 0.2 per cent of the total GDP.
2015: According to Philips Consulting, Nigeria’s aviation industry directly contributed N90.8 billion received from airports, airlines, and ground services, to the nation’s GDP in 2015. An analysis by IATA estimated the aviation sector’s contribution to be 0.4 per cent of Nigeria’s GDP in 2015. According to the report, the direct contribution of the sector is estimated at $462 million (N90.8 billion), while the indirect contribution is estimated at $464 million (N91.2 billion) from the supply chain.
2016: The figure released by the NBS as the sector’s contribution was NGN 119 billion which represents 0.4 per cent of the national GDP.
2017: No direct GDP contribution figure for 2017 is provided by the National Bureau of Statistics for the aviation industry though the NBS published the GDP growth rates for the air transportation and storage sector, showing an increase to 10.22 per cent in Q1 2018 from 4.71 per cent in Q4 2017 and 0.48 per cent in Q3 2017.
2018: The NBS said the industry contributed N149.35bn to the GDP in 2018, which is 0.12 per cent.
2019: The NBS reported that the industry contributed N198.62bn to the GDP as of the end of 2019 which is 0.14 per cent.
2020: According to the NBS, the sector contributed N101.1 billion to the GDP in 2020, a figure impacted by the pandemic.
2021: According to the NBS, the sector contributed N145.5 billion to the country’s GDP in 2021. This figure represents the sector’s direct contribution and was valued at a different exchange rate than other reports that provide a higher dollar-based contribution.
2022: The NBS reported that the sector contributed N178.4 billion to the GDP in 2022.
2023: The NBS report showed that the sector contributed N215.6 billion to Nigeria’s GDP in 2023.
Aviation sector vs others
Daily Sun had earlier analysed Nigeria’s GDP report from Q1 2022 to Q4 2023 as released by the NBS and it showed that the transportation sector (which includes, air, road, rail, water transport, post and courier services), has not been among the top contributors to real GDP growth since Q1 2022. This suggests that while transportation is crucial for economic activity, its direct contribution to GDP growth has been limited. Real GDP is the value of a country’s goods and services produced in a specific period, adjusted for inflation or deflation. It is an important indicator of a country’s economic health.
The contribution of the transportation sector to Nigeria’s GDP declined in Q2 2024 compared to both the previous year and the previous quarter. For the real GDP, the sector contributed just 0.74 percent in the same quarter (Q2 2024), lower than the 0.89 percent recorded in the preceding year and lower than 1.18 percent recorded in the first quarter of 2024. This negative growth rate indicates a decline in output adjusted for inflation. In contrast, Daily Sun’s analysis shows that information and communication, trade and real estate, has consistently been a major driver of Nigeria’s economic growth. While agriculture has maintained a significant contribution, that of the manufacturing sector has been stable.
In the first nine months of 2024, the finance and insurance sector led Nigeria’s 3.2 percent GDP growth with the industry contributing 30.3 percent, followed by water supply, waste management and remediation at 8.3 percent. The mining and quarrying sector contributed 5.7 percent, with the information and communication sector following closely at 5.2 percent, arts, entertainment and recreation, 3.8 percent, while energy supply is at 3.4 percent, accommodation, food and services, 3.3 percent, health and social services, 2.6 percent, public administration, 2.2 percent and education, 1.9 percent.
Analysis of top GDP contributors from 2022-2023
Q1 2022: Agriculture (22.36 percent), Trade (16.13 percent), Information and Communication (16.20 percent), Real Estate Services (5.34 percent), Finance and Insurance (4.51 percent), Construction (4.18 percent), Professional, Scientific and Technical Services (3.23 percent), Public Administration (1.63 percent), Education (1.92 percent) and other services (4.05 percent).
Q2 2022: Agriculture (23.24 percent), Information and Communication (18.44 percent),Trade (6.81 percent), real estate services (5.33 percent), finance and insurance (4.25 percent), mining and quarrying (6.51 percent), construction (3.21 percent), professional, scientific and technical services (3.04 percent), other services (2.74 percent) and public administration (2.17 percent)
Q3 2022: Agriculture (29.67 percent), information and communication (15.35 percent), trade (15.35 percent), real estate services (5.61 percent), finance and insurance (3.49 percent), mining and quarrying (5.90 percent), Construction (3.32 percent), professional, scientific and technical services (3.23 percent), other services (2.23 percent), public administration (2.05 percent).
Q4 2022: Agriculture (26.46 percent), information and communication (16.22 percent), trade (15.82 percent), real estate services (6.18 percent), finance and insurance (3.95 percent), mining and quarrying (4.71 percent), construction (3.47 percent), professional, scientific and technical services (3.34 percent), other services (2.23 percent) and public administration (2.05 percent).
Q1 2023: Trade (15.97 percent), Information and Communication (17.47 percent), Professional, Scientific and Technical Services (3.25 percent), Real Estate Services (5.31 percent) Construction (4.22 percent), Financial and Insurance (5.35 percent), Manufacturing (10.13), Electricity, Gas, Steam and Air Conditioning Supply (0.20 percent), Water Supply, Sewerage, Waste Management and Remediation (0.23), Public Administration (1.63 percent).
Q2 2023: Information and Communication (19.54 percent), Trade (16.80 percent), Agriculture (23.01), Manufacturing (8.62 percent), Real Estate Services (5.29), Financial and Insurance (5.26 percent), Construction (3.23 percent), Professional, Scientific and Technical Services (3.05 percent), Public Administration (2.17 percent), Other Services (2.72 percent)
Q3 2023: Services Sector (52.70 percent), mining and quarrying (5.64 percent), agriculture (29.31 percent), manufacturing (8.42 percent), electricity, gas, steam and air Conditioning supply (0.37 percent), water supply, sewage, waste management rand Remediation (0.20 percent), construction (3.36 percent) and trade (15.19 percent).
Q4 2023: Agriculture (26.11 percent), Trade (15.50 percent), Information and Communication (16.66 percent), Real Estate Services (6.06 percent), Finance and Insurance (4.95 percent), Mining and Quarrying (4.91 percent), Manufacturing (8.23 percent), Construction (3.47 percent), Public Administration (2.10 percent), Education (2.05 percent), Human Health and Social Services (0.66 percent).
The sectoral breakdown shows that overall, finance and insurance, agriculture and information and communication have been consistent drivers of Nigeria’s GDP growth, while the aviation sector has struggled to make any meaningful impact.
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