Nigeria’s economy grew at a slower-than-expected pace after the oil sector contracted for a 13th straight quarter, adding to the list of issues President Bola Tinubu needs to address.
(Bloomberg) — Nigeria’s economy grew at a slower-than-expected pace after the oil sector contracted for a 13th straight quarter, adding to the list of issues President Bola Tinubu needs to address.
Gross domestic product in the continent’s biggest oil producer expanded 2.5% in the three months through June from a year earlier, compared with 2.3% in the prior quarter, the statistics agency said Friday. That undershot a median estimate for growth of 2.8% in a Bloomberg survey of five economists.
The yield on the nation’s dollar bonds due 2032 stayed seven basis points higher on the day at 11.07%.
The 3.58% growth in the non-oil sector in the second quarter from a year earlier was offset by a contraction in the oil sector. The industry contracted 13% as production decreased to 1.2 million barrels per day. That compared with 1.5 million barrels per day from a year earlier.
Nigeria has been trying to ramp up production to reach its full OPEC+ quota but has been beset by ongoing supply disruptions, theft and pipeline vandalism.
The weak growth adds to challenges Tinubu will have to address to obtain the double-digit expansion in the next couple of years he is targeting. The last time Nigeria’s economy expanded more than 10% was in 2010.
Growth is also likely to be crimped in the next quarter by Tinubu’s decision to remove fuel subsidies on May 29 and ease exchange controls a few days later, which has led to the naira losing 40% of its value against the dollar and sent prices soaring. Annual inflation quickened to a fresh 18-year high of 24.1% in July.
Last week Tinubu partially walked back those reforms when he suspended increases in gasoline prices.
–With assistance from Simbarashe Gumbo and Anthony Osae-Brown.
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