27 August 2018 : The National Bureau of Statistics (NBS) released Nigeria’s Q2’18 Gross Domestic Product (GDP) figures this morning, showing a real growth of 1.5% y/y (Vetiva: 1.6%, Consensus: 2.0%) for the period, below the 2.0% reported in the first quarter of 2018. Notably, we highlight that the slower pace of economic growth was partly driven by a weaker performance in the Oil & Gas sector – reporting a negative y/y real GDP growth of 4.0% (Q1’18: 14.8%) - following the moderation in oil production (Q2’18: 1.84mpd, Q1’18: 2.0mpd) due to a force majeure on some pipelines during the period. 

Furthermore, sectoral contribution to GDP showed a mixed trend with the rout in Agriculture sector accelerating in Q2’18 (GDP printing at 1.2% vs. 3.0% in Q1’18). Meanwhile, whilst growth in the Services sector picked up (Q2’18: 2.1%, Q1’18: -0.47%), momentum in the Manufacturing sector slowed significantly with Q2’18 GDP at 0.40% vs 6.9% recorded in the previous quarter. Further driven by the weaker than expected GDP figure, we expect sustained downbeat sentiment in the capital markets this week. 

Reporting for EasyKobo on Monday ,27 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited