August 27, 2024/CSL Research

The Gross Domestic Product (GDP) report published by the National Bureau of Statistics (NBS) indicates that Nigeria’s GDP grew by 3.19% y/y in real terms in Q2 2024. This growth rate surpasses the 2.51% recorded in the second quarter of 2023 and the 2.98% reported in Q1 2024.

The non-oil sector continued to be the primary driver of the economy, contributing approximately 94.30% to total GDP, while the oil sector contributed 5.70%. However, growth
in the non-oil sector remained relatively unchanged at 2.80% in Q2 2024, similar to Q1 2024.
Conversely, the oil sector showed significant improvement, with growth rising to 10.15% y/y
in Q2 2024, compared to 5.70% y/y in Q1 2024.

The services sector, a key driver of Nigeria’s GDP, grew by 3.79% in Q2 2024, down from the 4.42% growth seen in Q2 2023 and 4.32% in Q1 2024. However, its contribution to the aggregate GDP grew slightly to 58.76%, compared to 58.42% in Q2 2023 and 58.04% in Q1 2024. The agriculture sector recorded a growth rate of 1.41%, a marginal decrease from the 1.50% growth in Q2 2023 but an improvement over the 0.18% growth in Q1 2024.

This sector’s growth is likely to remain subdued due to ongoing insecurity in key food-producing areas and unpredictable weather conditions. The industry sector, however, showed a significant recovery, growing by 3.53% y/y, a notable improvement from the -1.94% in Q2 2023 and 2.19% in Q1 2024.

The nation’s average daily oil production (excluding condensates) slightly increased to 1.41 mbpd in Q2 2024 from 1.22 mbpd in Q2 2023, however, it remained lower than the 1.57 mbpd
recorded in Q1 2024. The oil sector grew by 10.15% y/y in Q2 2024, compared to 5.70% y/y growth in Q1 2024. The manufacturing sector’s growth has been modest, hindered by the Central Bank of Nigeria’s (CBN) hawkish monetary policy stance.

The sector’s challenges were exacerbated by a hike in petrol prices and the continuous devaluation of the Naira. In Q2 2024, the manufacturing sector’s growth rate was 1.28%, down from 1.49% in Q1 2024. Overall, we have revised our 2024 real GDP growth forecast downwards to 3.24% y/y from our initial forecast of 3.37% at the start of the year, mainly due to the delayed commencement of petrol refining by the Dangote refinery which we expected to boost the performance of the manufacturing sector in the second half of the year.

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