A few bright spots from the services sector in Q4 2015

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Thursday, March 10, 2016 09:30 AM /FBNQuest Research

From the national accounts for Q4 2015 we today highlight the five fastest growing sectors. We include what the NBS terms activity sectors, which are often subdivided into segments, and only those accounting for at least 1% of GDP at constant basic prices.

Education was again the leading sector, posting growth of 8.1% y/y (from 8.0% in Q3). It has government and private components: the first should benefit from the new administration's spending plans and the second from its position as a core element of household budgets.

The five fastest growers all belong to the services sector, as in Q3. Additionally, other services recorded very strong growth of 17.0% y/y, which we exclude from the top five because of its miscellaneous status.

Finance and insurance posted the second highest growth in Q4, at 6.4% y/y. The sector provides services for middle income and corporate Nigeria. The head of one household FMCG company told The Economist conference in Lagos earlier this week in Lagos that the middle class accounted for 40% of its sales in Nigeria.

This theme can be extended to information and communications (4.2% y/y) if we buy into the narrative that the telecoms operators are actively marketing data services rather than their vanilla voice products.



The first quarter of the year is generally the weakest for growth, not least because of delays in approving the budget and therefore in releasing funds for capital investment. Household spending also dips after the holiday season. 2016 is unlikely to prove an exception.

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