Q2 2022 GDP Report – An Unconvincing Output Expansion

Inflation Rate Continues to Rise Unabatedly

According to data from the National Bureau of Statistics (NBS), the Nigerian economy grew by 3.54% YoY in Q2 2022 (Q1 2022: 3.11% YoY). When we analysed the numbers, we realized that the GDP growth was driven by a moderation in the decline of the Oil sector output rather than a broad-based output growth across the key sectors. Although the Non-Oil sector grew, the growth was slower than what was recorded in Q1 2022.

Oil Sector

Occasioned by an 11.18% YoY daily oil production decline to 1.43mbpd in Q2 2022, the Oil Sector dipped for the ninth consecutive quarter by 11.77% YoY. The decline in Q2 2022 was an improvement to Q1 2022 Oil sector’s performance (-26.04% YoY). We attribute the decline in oil production and Oil sector output to persistent crude oil theft, oil pipeline vandalism, and weak investments in the oil sector due to unfavourable macroeconomic conditions. The problem of crude oil theft heightened in 2022 with reports suggesting an output loss of 80% – 90%. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) estimated the monthly value loss of crude oil at $234mn.

Non-Oil Sector

The Non-Oil sector grew by 4.77% YoY in Q2 2022, about 131 basis points lower than the Q1 2022 growth of 6.08%. Key sectors including Agriculture, Information & Communication, Manufacturing, Finance & Insurance, and Trade all recorded a slower output growth in Q2 2022. In our opinion, we attribute the slower growth to the rising impact of inflationary pressures on aggregate demand, as household purchasing power declined. Also, we note that for some industrial sectors, disruptions in the global energy market due to the fall-out between Russia and Ukraine limited production capacity in Q2 2022.


The geopolitical tensions in Eastern Europe will continue to exert pressure on the global economy through the outsized impact on the global commodities market (including energy). Evidently, the impact was felt in the Nigerian economy in Q2 2022. In the near term, we expect these pressures to persist, and we see Non-Oil sector growth further moderating in H2 2022.

We also see the Oil sector decline moderating in H2 2022 due to a normalization of the high base that led to the steeper decline in the previous quarters. However, we are less optimistic about the national authorities’ resolve to combat the high spate of crude oil theft.

Overall, we revised our growth outlook to reflect pressured output growth, as we expect the pass-through effect of the geopolitical conflict to sustain in H2 2022. We now forecast a FY 2022 GDP growth of 3.26% (previous estimate: 3.30%).

Please follow the link “Q2 2022 GDP Report – An Unconvincing Output Expansion” to view the whole report.

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