September 5, 2017/Cordros Research
The National Bureau of Statistics (NBS) just released Nigeria’s Q2-2017 GDP figure, showing that the domestic economy exited recession (in line with consensus expectation) after five consecutive quarters of negative growth, with real GDP growing by 0.55% y/y (vs. revised 0.91% y/y in the previous quarter and -1.49% y/y in Q2-2016). The growth estimate came in 75 bps lower than Bloomberg’s compiled median estimate of 1.30%.
A quick look at the breakdown of the GDP figure shows that the oil sector rebounded, growing by 1.64% (from –11.64% in Q1-2017 and -17.48% in Q2-2016). Over the three months period, output from the oil sector was supported by relatively higher domestic crude oil production. The NBS estimated crude oil production during the three months period to be 1.84mbpd, which improved from the 1.69mbpd reported in Q1-17, and also ahead of the 1.81mbpd achieved in Q2-2016. Compared to Q1-17, the oil sector grew by 7.52%, contributing 8.89% of total GDP (vs. 8.79% and 8.53% in the corresponding quarter of 2016 and Q1-17 respectively).
The non-oil sector remained strong, expanding by 0.45% y/y in Q2-2017, 83 bps higher than the rate recorded in Q2-2016, but 28 bps lower than the rate posted in the previous quarter. Output growth in this sector was supported by activities in the following subsectors: agriculture (crop production), finance and insurance, electricity, gas, steam, and air conditioning supply and other services.
A quick look at the breakdown of two of the biggest components of the GDP shows that agriculture grew by 3.01% y/y (vs. 3.39% y/y in Q1-2017) while manufacturing expanded by 0.64% – 400 bps higher than Q2-2016’s figure but 72 bps lower than the rate recorded in the previous quarter.
In terms of contribution, services, agriculture, and industries, respectively, accounted for 53.73%, 22.97%, and 23.31% of overall output growth.