Nigerian economic expansion accelerates on higher oil production

(Bloomberg) – Nigeria’s economy grew at a faster pace in the second quarter, helped by higher crude production that offset the impact of the naira’s devaluation on non-oil industry growth.

Gross domestic product expanded an annual 3.19% in the three months through June, compared with 2.98% in the previous quarter, according to data released by the Abuja-based National Bureau of Statistics on Monday. The figure matched the median estimate of four economists in a Bloomberg survey.

Production in Nigeria has been boosted by a series of economic reforms that President Bola Tinubu has unleashed since coming to power in May 2023 to attract foreign investment. The authorities are targeting growth of 3.8% this year, compared with 2.7% last year, and a return to 6% — a rate it last achieved in 2014 — in the coming years, according to Finance Minister Wale Edun.

Crude production grew to 1.41 MMbpd in the second quarter, compared with 1.22 MMbpd a year earlier, the statistics office said.

Daily oil production in Nigeria, Africa’s biggest producer, is expected to rise to about 2 MMbpd by the end of this year, Oritsemeyiwa Eyesan, executive vice president of the Nigerian National Petroleum Corp.’s upstream division, said last week.

The non-oil sector grew 2.8% in the period, down from 3.6% a year ago. Agriculture output slowed to 1.4% from 1.5%, while the transport industry shrank 9.1%, compared with a contraction of 44.2% a year earlier.

The International Monetary Fund projects that Nigeria’s economy will expand 3.3% this year, which will lower the Nigerian economy’s ranking to the fourth-largest in Africa behind South Africa, Egypt and Algeria.