By Aduragbemi Omiyale
A notable investment house, Meristem Securities, has projected a 3.42 per cent growth in Nigeria’s Gross Domestic Product (GDP) in the second quarter of 2024.
Recall that in the first quarter of the year, Nigeria’s economy grew by 2.98 per cent on a year-on-year basis versus 2.31 per cent in the same period of last year, though lower than the 3.46 per cent recorded in the last quarter of 2023.
On Monday, August 26, 2024, the National Bureau of Statistics (NBS) is expected to release the GDP figures for the second quarter of this year, and Meristem analysts believe that the growth will be driven by rise in crude oil production, which according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), reached an average of 1.50 million barrels per day (mbpd) in June 2024 versus 1.45 mbpd in April 2024.
This led to an overall average production of 1.47 mbpd for the quarter compared with the 1.39 mbpd recorded in the second quarter of 2023, reflecting a 5.61 per cent YoY growth.
It was stated that the increase was primarily due to higher output from major terminals like Bonny and Forcados and the resumption of operations at previously inactive terminals such as Okono. Additionally, government efforts to enhance security along oil infrastructures also contributed to this rise in production.
Business Post reports that the 2.98 per cent GDP growth in the first three months of this year was fuelled by a 5.7 per cent YoY rise in the oil sector and a moderate 2.8 per cent YoY growth in the non-oil sector, with the oil ecosystem recording a spike in average daily production of 1.54 mbpd, in contrast to the 1.53 mbpd in Q1 2023.
Amid macroeconomic challenges recorded between April 2024 and June 2024, particularly high inflation driving up operational costs, Meristem Research noted that the financial services sector has managed to find opportunities in the current environment.
It said the sector has benefited from the high-interest rate landscape, which has resulted in increased interest and trading incomes.
“Moreover, the ongoing depreciation of the Naira has led to revaluation gains on foreign currency-denominated financial assets.
“Additionally, the sector’s growth trajectory has been supported by improved technological leverage, with the PMI averaging 50.27pts in Q2:2024, up from 42.74pts in Q1:2024.