Nigeria's Economy Shifts: Agriculture and Services Surpass Oil in Growth

In a country once defined by oil, Nigerias economy is undergoing a quiet transformation. The real engine of growth is no longer found in pipelines or refinery gates, but in fields, markets, and smartphones.

A recent change in how the economy is measured has brought this shift into sharp focus. Known as GDP rebasing, the exercise updates the way the country calculates its economic output, using fresher data to reflect how Nigerians actually earn and spend. And the results tell a different story.

The long-held image of an oil-fuelled, industry-led economy is fading. Agriculture and services have grown in prominence, while industry, especially manufacturing, has shrunk.

The new breakdown

Based on the old calculation method using 2010 prices, Nigerias 2019 economy was estimated to comprise 22.1 percent agriculture, 27.7 percent industry, and 50.2 percent services. The revised data tells a different story: agriculture now accounts for 25.8 percent, industry has dropped to 21.1 percent, and services have grown to 53.1 percent.

Read also: Nigeria below regional peers as manufacturing accounts for just 12.7% of GDP Minister

The numbers may seem technical, but the implications are deeply personal. Agricultures rise reflects what rural households already experience: farming is central to survival, not a last resort.

Still, not everyone is convinced this reflects real progress. In my opinion, while the rebasing is timely, productivity has not increased in the real sense. We are still operating below potential, said Abdulbasit Shuaib, an economist with a multinational company. His concern is echoed in parts of the country where daily realities still dont match the story that rebased data suggests.

The sharp drop in industry signals the deepening struggles of factories facing power cuts, high input costs, and unclear regulation. Services, meanwhile, have emerged as the real growth story, from logistics and mobile banking to barbershops and social media marketing.

Whats changing on the ground?

For the average Nigerian, this shift means the economy is finally catching up with lived experience. Most people dont work in oil rigs or factories. They sell, deliver, sew, code, plant, or drive. These activities, once sidelined in policy conversations, are now the countrys economic core.

The rebasing makes one thing clear: Nigerias economy is not just about exports or revenue from crude oil. Its about people making things work in a difficult environment, often informally, often without support.

This should shape how governments plan. Investing in rural roads, irrigation, mobile connectivity, and urban transport would go further than another tax break for oil multinationals. If agriculture and services are where people find work and income, then thats where support should go.

 Reversing this trend will take more than rhetoric. It will require coordinated reform: stable power, affordable finance, targeted support for local inputs, and a tax system that doesnt punish productivity.

The pain in the factory belt

Industrys decline is more than just a statistical dip. Its a sign that local manufacturing, once the great hope of economic diversification, is in distress. Many firms are scaling back or shutting down due to unreliable electricity, multiple taxes, expensive imports, and crumbling infrastructure.

Read also: Tourism and hospitality: Unlocking Africas hidden engine of GDP growth

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This is a concern because industrial jobs tend to be more stable, formal, and export-orientated. Manufacturing also supports wider value chains from suppliers to transporters. Letting it wither could mean giving up on balanced growth and long-term competitiveness.

Reversing this trend will take more than rhetoric. It will require coordinated reform: stable power, affordable finance, targeted support for local inputs, and a tax system that doesnt punish productivity.

The rise of the services sector

Services now drive more than half of the economy. Some of this is in banking, telecoms, and finance. But a lot of it is informal: ride-hailing, online retail, cleaning services, and logistics.

This growth is not without risk. Informal jobs often lack protection, benefits, or consistent pay. But they also show innovation and resilience. With limited resources, Nigerians are building solutions and serving growing demand.

To make this sustainable, the government must catch up. It needs to expand digital access, offer vocational training, improve broadband coverage, and enact laws to protect both businesses and consumers.

Not just an accounting exercise

GDP rebasing is not just about new numbers. It is a mirror. And what it shows is that Nigerias economy is changing quietly, rapidly, and from the bottom up.

While it gives investors and policymakers a clearer picture of where growth is happening, it doesnt solve deeper economic challenges.

Rebasing is good because it shows where the economy is performing and where investors can direct their funds, said Marcel Okeke, former chief economist at Zenith Bank. But for real impact, issues like inflation, insecurity, and poor infrastructure must also be tackled. Those are the factors that truly drive economic confidence.

Yet some analysts caution that these changes, though useful on paper, may obscure deeper weaknesses. This economy is far below its potential, as the data suggest. $250 billion is quite abysmal. In naira terms there is growth as well. You see that exchange rate thing; comparative analysis on a global scale will continue to put us at the end of the table, said Oluwatobi Abisoye, a financial and corporate report analyst.

Read also: NBS to release Nigerias rebased GDP figure this month

Oil still matters. But it no longer defines the economy or the future. Nigerias real strength now lies in its farmers, its tech entrepreneurs, its traders, and its workers. Recognising and investing in this reality may be the difference between fragile recovery and lasting growth.

To move forward, Nigeria must stop chasing legacy sectors and start backing the real economy: its people, their ideas, and the sectors where their labour actually lies.

Oluwatobi Ojabello, senior economic analyst at BusinessDay, holds a BSc and an MSc in Economics as well as a PhD (in view) in Economics (Covenant, Ota).

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