Uninspiring GDP figures

The national accounts for Q3 2018 show that GDP growth picked up to 1.8% y/y, compared with 1.5% recorded in the previous quarter. Our expectation was 2.1% y/y. The oil sector contracted by -2.9% y/y, a little better than Q2’s -4.0%. The NBS put average crude output in Q3 at 1.94mbpd, compared with 1.84mbpd the previous quarter. Non-oil GDP growth accelerated to 2.3% y/y, and is inching towards expansion in per head terms. We 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 8.6% in Q3 2018, which makes it the fourth largest sector in the economy after agriculture, trade, and information and communications. However, through its linkages across other sectors, the indirect oil economy may be as large as 40-50% of GDP.
  • Trade grew for the first time this year, admittedly by a paltry 1.0% y/y. It is the best barometer for economic activity across Nigeria, and should post a better performance in the current quarter.
  • Agricultural growth was a disappointing 1.9% y/y, constrained by wide-scale insecurity and food supply disruption in several growing areas.
Real GDP, oil and non-oil growth (% chg; y/y)

Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research


  • These are uninspiring figures and we struggle to see much acceleration beyond the slow build-up in household spending power ahead. The growth rates of 5%+ y/y achieved through to end-2014, driven largely by high oil prices over a five-year period, now seem far away.
  • Turning to the Q4 2018 data, we project growth at 2.7% y/y with little or no contribution from the oil sector. We see the boost to the non-oil economy coming from seasonality in household spending and a modest stimulus from the federal and many state governments. We should also make allowances for the increase in money in circulation from election campaigning.

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