Nigeria’s Q2 GDP data expected to show faster growth

Nigeria’s economy, once Africa’s biggest, grew at a faster pace in the second quarter of the year, analysts at London-based Capital Economics said ahead of the release of GDP data for the period.

“We think Q2 GDP figures due on Monday will show that Nigeria’s economic growth accelerated to 3.2% y/y in Q2,” David Omojomolo, Africa economist at the economic research firm said in their latest note on Nigeria.

He pointed out that the economy expanded by 3.0% y/y in Q1, a slowdown from Q4’s 3.5%, as rising inflation and tighter monetary policy dragged on the non-oil economy while the oil sector’s growth rate halved.

He said: “Nigeria’s oil production has recovered for two consecutive months, to around 1.4mbpd, as authorities battle with insecurity and inefficiency that have held back output. This should provide a boost that reverses the slowdown in the sector recorded last quarter. Meanwhile, we think the non-oil sector recorded a modest pick-up too. With the impact of distortionary FX policies fading and loose fiscal policy supporting incomes that have been hit by high inflation.

“Further ahead, we expect the oil sector to provide more support to growth as production rises. Non-oil sector growth should also improve as inflation slows. We have pencilled GDP growth of 3.0% over 2024 as a whole and 3.5% in 2025.”