The NBS published Q1-18 GDP report earlier. Nigeria’s GDP grew 1.95%, underperforming consensus estimates. However, the manufacturing sector (+3.4%), printed the fastest growth in more than 10 quarters, as momentum in the Food & Beverage(5.5%), Cement(+5.3%), Oil refinery(+7.1%) and Textile(+1.9%) Sub-Sectors, strengthened. While the Financial services sector also posted a notable 13.4%y/y growth, the fastest since 2015, the Agric Sector (up 3.0%) printed the slowest growth since 2015. Livestock output surprisingly declined 1.9% while Crop Production output remained resilient, up 3.5%y/y despite the Herdsmen Crisis during the period.
The Services sector (down 0.5%y/y) relapsed, dragged by weaker growth in the Trades (-2.6%) and Real Estate (-9.4%) sub-sectors. Notably, while yearend
spending on festivity may have bolstered Retail Trade in Q4-17, the contraction inQ1-18 is linked to a less aggressive spending, typical of the beginning of
a new year. Meanwhile, the real estate sector continues to falter amid weaker consumer spending and rising supply.
While a wide-spread disappointment on the GDP number, buttressed by Bloomberg consensus estimate of 2.6% vs. 1.95% actual, is substantiated by dramatic improvement observed across other key macro indicators during the period, slower momentum, typical of Q1, is a probable factor. However, the developments in the manufacturing sector point to faster recovery going forward.