Some movement in the non-oil economy

The national accounts for Q2 2018 show that the economy grew at a slower pace of 1.5% y/y, compared with 2.0% recorded in the previous quarter. Our expectation was 1.7% y/y. The oil sector contracted by -4.0% y/y, while the non-oil economy grew by 2.0% y/y. The slump in real oil output is a reflection of the numerous pipeline shutdowns that occurred in Q2, which had adverse effects on production. We continue to comment on the broad aggregate trends on a y/y basis because the data are not seasonally adjusted.


  • Oil’s formal share of real GDP amounted to just 8.5% in Q2 2018, which makes it the fifth largest sector in the economy after agriculture, trade, telecommunications and manufacturing. However, through its linkages across other sectors, the indirect oil economy may be as large as 40-50% of GDP.


  • For the non-oil economy, the major drivers for growth were telecommunications and transport & storage; both sectors posted double-digit growth. For the latter, we loosely link its performance to positive outcomes from the FGN’s infrastructure spending (road and rail networks have been beneficiaries).


  • Trade is probably the best barometer for economic activity across the country. It did better but nonetheless contracted by -2.1% y/y.
Real GDP, oil and non-oil growth (% chg; y/y)

Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  • Agriculture grew by 1.2% y/y, compared with 3.0% recorded in Q1. The recorded slowdown is likely influenced by clashes between herdsmen and farmers in the middle belt (i.e. the country’s agriculture hub). This has disrupted domestic food supply
  • Turning to the Q3 2018 data, we project growth at 2.1% y/y.  We see support for growth from the FGN’s expansionary fiscal stance, rising household consumption and a pick-up in investment by the private sector in selected segments of the economy.


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