Despite improved economic activities post-suspension of the Naira redesign policy which slowed down economic activities in Q1 2023, the GDP for Q2 2023 as published by National Bureau of Statistics (NBS)  grew by 2.51% year-on-year in real terms. This denotes a 1.03% decline from the growth rate of 3.54% recorded in Q2 2022, and a marginal 0.20% increase from 2.31% reported in Q1 2023.

The Oil sector contribution to GDP amounted to 5.34%, marking a decline from previous contribution of 6.33% in Q2 2022, and 6.21% in Q1 2023.

The Non-Oil sector’s contribution to the total GDP increased to 94.66% in Q2 2023, up from 93.67% Q2 2022, and 93.79% in Q1 2023.


The reported GDP growth of 2.51% in Q2 2023 fell short of our anticipated projection of 2.60%, due to unabating inflationary pressures, FX illiquidity and heightened insecurity in the Oil sector.

We hold a tepid stance on our outlook for the Oil sector, reflecting our reservations concerning the efficacy of national authorities in addressing the high spate of crude oil theft. According to the latest report by OPEC+, the oil production declined at the start of Q3 2023, as July 2023 oil production fell to 1.25mbpd from 1.29mbpd reported in June 2023. Barring any shock, we do not expect significant improvement in oil production in the near term.

For the Non-Oil sector, we anticipate a sustained growth in the Services sector, primarily driven by Information and Communication sub-sector. The anticipation of the sub-sector growth stems from the increased internet penetration to meet growing demand as a result of increased digital adoption.

Overall, we maintain that GDP growth will sustain a languid pace throughout the year. This expectation is premised on the full impact of FX harmonization, subsidy removal and other reforms that may squeeze household demands, increase firm cost of operation and low investment from the new administration and private sector.  Taking these considerations into account, we revised our FY 2023 GDP growth forecast to 2.70% (previous: 2.72%).

Please follow the link “Q2 2023 GDP Report – Economic Expansion Remains Sluggish as Macroeconomic Challenges Worsen” to view the whole report.

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