Nigeria’s Economy Expands by 4.23% in Q2 2025

The National Bureau of Statistics (NBS) has reported that Nigeria’s Gross Domestic Product (GDP) grew by 4.23% year-on-year in real terms during the second quarter of 2025, outperforming the 3.48% growth recorded in the same period of 2024.

In nominal terms, aggregate GDP stood at ₦100.73 trillion, up from ₦84.48 trillion in Q2 2024, representing a 19.23% increase.

Oil Sector Recovery Fuels Growth

The oil sector was the standout performer. Average daily crude oil production rose to 1.68 million barrels per day (mbpd), higher than both 1.41 mbpd in Q2 2024 and 1.62 mbpd in Q1 2025. This rebound translated into 20.46% real GDP growth for the sector, a sharp improvement from 10.08% in Q2 2024 and 1.87% in Q1 2025.

The oil sector’s share of GDP also ticked up to 4.05%, compared with 3.51% in Q2 2024.

Non-Oil Sector Remains the Mainstay

Despite the oil sector’s rebound, the non-oil economy continued to dominate output, contributing 95.95% of total GDP. It expanded by 3.64% year-on-year, higher than 3.26% in Q2 2024 and 3.19% in Q1 2025.

Key drivers included:

• Agriculture: Grew by 2.82%, up from 2.60% in Q2 2024 and 0.07% in Q1 2025. Crop production remained the backbone, though the sector’s share of GDP eased slightly to 26.17% (Q2 2024: 26.53%).
• Industry: Posted strong growth of 7.45%, more than double the 3.72% recorded a year earlier. However, manufacturing slowed to 1.60%, down from 2.07% in Q1 2025, with its contribution dipping to 7.81%.
• Services: Grew by 3.94%, marginally above 3.83% in Q2 2024. Trade contributed 18.28% to GDP, though its real growth slowed to 1.29% (Q2 2024: 1.82%).

A strong oil sector rebound buoyed Nigeria’s Q2 2025 economic performance, but the non-oil economy, led by agriculture, services, and industry, remained the dominant contributor to GDP.

Equities Market Update

The Nigerian equity market recorded modest gains this week as the ASI edged up by 0.20% w/w to close at 142,133.02 points, while market capitalization advanced to ₦89.96 trillion.

Market activity strengthened significantly, with total turnover surging to 7.68 billion shares from 2.73 billion shares in the prior week. In value terms, traded shares rose sharply to ₦494.13 billion, compared to ₦85.20 billion previously.

Sectoral Performance

• Industrial Goods: Led the week’s gains with a 1.33% w/w increase, supported by renewed demand in DANGCEM (+0.98%).
• Consumer Goods: Up 1.15% w/w, driven by strong interest in INTBREW (+10.08%) and DANGSUGAR (+3.91%).
• Banking: Added 1.19% w/w, buoyed by bargain-hunting in key names such as STANBIC (+9.29%) and ZENITHBANK (+9.14%).
• Oil & Gas: Declined 1.62% w/w, weighed down by sell-offs in ETERNA (-10.00%).
• Insurance: Slipped 0.91% w/w, dragged by losses in AFRIPRUD (-9.09%) and CUTIX (-8.57%).

While the overall market gained slightly, activity was robust, and sectoral performance was broadly positive. Industrial, consumer, and banking stocks drove the upside, whereas oil & gas and insurance sectors faced downward pressure.

Fixed Income Market Update

System liquidity opened the week on a strong footing, with balances at ₦4.02 trillion on Friday, well above the ₦1.67 trillion recorded the previous Friday. This liquidity boost pushed interbank rates lower, as the Open Repo (OPR) and Overnight (ON) rates declined by 200 basis points and 207 basis points, closing at 24.50% and 24.88%, respectively.

At the primary market, the CBN (via the DMO) made repayments of ₦259.04 billion on Monday, followed by an OMO repayment of ₦254.9 billion on Tuesday.

In the secondary market, trading activity was mixed, though overall sentiment skewed bullish, supported by the announcement of a Monetary Policy Rate (MPR) cut. The bond market was relatively calm, with yields closing slightly lower. The 5-year bond yield fell to 16.46% (-131bps), while the 7-year bond yield eased to 16.64% (-69bps), reflecting strong buying interest.

In the NTB market, demand was even more pronounced. The 182-day and 364-day bills recorded significant buying interest, with yields falling by 296bps and 125bps, to settle at 17.96% and 19.16%, respectively. The 91-day bill also dipped marginally, closing at 17.74% (-34bps).

Strong liquidity inflows and debt repayments buoyed the fixed income market, driving interbank rates down and supporting bullish sentiment across bonds and NTBs, particularly in the mid- to long-tenor instruments.

Market Outlook for the Coming Week

Equities

Momentum in the equity market is likely to hinge on continued interest in bellwether stocks. Following the correction triggered by H1’25 earnings, value hunters have driven gains in the Banking and Industrial Goods sectors. The key question for the week will be whether this buying interest can be sustained, or if profit-taking will set in and cap the market’s upward trajectory.

Fixed Income

We expect a quiet start to the week ahead of the scheduled bond auction on Monday, which will set the tone for trading. Market liquidity should remain strong, supported by coupon payments and FAAC inflows. Against this backdrop, we anticipate healthy buy-side demand in the OMO and NTB markets, as investors' position for attractive yields.

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