Insurance Firms, Banks Others Contribute N1.72trn To Economy

Banks, insurance companies and other financial institutions contributed N1.72 trillion to the nation’s real Gross Domestic Product (GDP) in the first half of the year, H1’23.

This represents 27 percent year-on-year YoY growth from the N1.35 trillion contributed in the same period of 2022, H1’22.

Economic Confidential analysis of GDP Q2’23 report of the National Bureau of Statistics (NBS) showed that financial institutions contributed N846.774 billion to the N17.72 trillion national GDP in Q2’23. This represents 2.8 per cent quarter-on-quarter, QoQ decline from the N870.8 trillion contributed to the national GDP of N17.75 trillion in Q1’23.

The NBS stated: “The Finance and Insurance Sector consists of the two subsectors, Financial Institutions, and Insurance, in which the former accounted for 90.78% and the latter 9.22% of the sector respectively in real terms in Q2 2023.

“As a whole, the sector grew at 28.00% in nominal terms (year-on-year), with the growth rate of Financial Institutions at 30.41% and 8.29% growth rate recorded for Insurance. The overall rate was lower than Q2 2022 by 1.90% points, and higher by 5.63% points than the preceding quarter.

“The quarter-on-quarter growth was -0.83%. The sector’s contribution to the nominal GDP was 4.01% in Q2 2023, higher than the 3.63% it represented a year previous, and lower than the contribution of 4.11% it made in the preceding quarter.

“In this sector in real terms totaled 26.84%, higher by 8.37% points from the rate recorded in the 2022 second quarter and higher by 5.47% points from the rate recorded in the preceding quarter. Quarter-on-quarter growth in real terms stood at -1.72%. The contribution of Finance and Insurance to real GDP totalled 5.26%, higher than the contribution of 4.25% recorded in the second quarter of 2022 by 1.01% points, and lower than 5.35% recorded in Q1 2023 by 0.08% points.”