Nigeria’s economy grew at a slower than expected rate in the first quarter as a sharp currency slump and adverse weather impacted the non-oil sector.

Gross domestic product expanded an annual 2.98% in the three months through March, compared with growth of 3.46% in the previous quarter, according to data released by the National Bureau of Statistics on Friday. The median estimate of eight economists in a Bloomberg survey was 3.5%.

Key contributors to the slower-than-expected growth were agriculture, due to bad weather and insecurity, and manufacturing where profits have been knocked by an almost 70% slump in the naira against the dollar since last year.

Weaker growth in those sectors contributed to the non-oil part of the economy expanding 2.8% - its slowest pace in two quarters.

One bright spot was the oil sector which grew for a successive quarter because of higher oil production. Output rose to 1.57 million barrels per day in the period, up from 1.51 million barrels a year earlier, helped by better security in the Niger Delta region.

Improved oil output is expected to continue. Minister of State for Petroleum Heineken Lokpobiri said Thursday that production - which includes crude and other hydro-carbons - is now at 1.7 million barrels per day from a low of 1.1 million barrels when Tinubu took office. Nigeria hopes to further lift production by opening bids for a dozen oil blocks and concluding several divestment deals with international oil companies in coming months.

The government is targeting an economic growth rate of about 3.8% in 2024 and a return to 6% or more in the coming years, which it last achieved in 2014. The International Monetary Fund projects 3.3% economic growth for 2024, which will lower Nigeria’s ranking to fourth largest in Africa.

Bloomberg