Economy
Nigeria’s GDP Slows to 3.10% in 2022 Despite 3.52% Growth in Q4
By Adedapo Adesanya
In 2022, the Gross Domestic Product (GDP) of Nigeria slowed to 3.10 per cent from 3.40 per cent recorded in the preceding year, 2021.
Data released by the National Bureau of Statistics (NBS) on Wednesday evening showed that this occurred amid a 3.52 per cent (year-on-year) growth in the economy in real terms in the fourth quarter of 2022.
Business Post reports that in the preceding quarter, Q3 of 2022, the country posted economic growth of 2.25 per cent, but when compared with the same quarter of 2021, it moderated from 3.98 per cent.
The performance of the GDP in the fourth quarter of 2022 was driven by the services sector, which recorded a growth of 5.69 per cent and contributed 56.27 per cent to the aggregate GDP.
Although the agriculture sector grew by 2.05 per cent in the reference period, its performance was significantly hampered by severe incidences of flood experienced across the country, accounting for lesser growth relative to the fourth quarter of 2021, which was 3.58 per cent.
Recall that Nigeria faced an unprecedented devastating flood disaster in the second half of the year, which saw 662 persons lose their lives, with 3,174 others suffering injuries and 2,430,445 individuals displaced, according to the National Emergency Management Agency (NEMA).
Moreover, the industry sector was yet challenged in the period under review, recording -0.94 per cent growth and contributing less to the aggregate GDP relative to the third quarter of 2022 and the fourth quarter of 2021.
This means that the performance of the agriculture and industry sectors reduced in 2022 relative to 2021, while the performance of the services sector improved in 2022.
According to the report, in the quarter under review, aggregate GDP stood at N56.7 trillion in nominal terms.
This performance is higher when compared to the fourth quarter of 2021, which recorded aggregate GDP of N49.2 trillion, indicating a year-on-year nominal growth of 15.18 per cent.
The NBS noted that the nation in the fourth quarter of 2022 recorded an average daily oil production of 1.34 million barrels per day, lower than the daily average production of 1.50 million barrels per day recorded in the same quarter of 2021 by 0.16 million barrels per day and higher than the third quarter of 2022 production volume of 1.20 million barrels per day.
It said the real growth of the oil sector was –13.38 per cent (year-on-year) in Q4 2022, indicating a decrease of 5.33 per cent points relative to the rate recorded in the corresponding quarter of 2021.
It explained that growth increased by 9.29 per cent points when compared to Q3 2022, which was –22.67 per cent.
On a quarter-on-quarter basis, the oil sector recorded a growth rate of -14.93 per cent in Q4 2022.
“However, the annual growth rate of oil stood at -19.22 per cent compared to the -8.30 per cent recorded in 2021.
“The Oil sector contributed 4.34 per cent to the total real GDP in Q4 2022, down from the figures recorded in the corresponding period of 2021 and the preceding quarter, where it contributed 5.19 per cent and 5.66 per cent, respectively. The total annual contribution of oil to aggregate GDP in 2022 was 5.67 per cent,” the report said.
The non-oil sector grew by 4.44 per cent in real terms during the quarter, the NBS said, noting that this rate was lower by 0.29 per cent points compared to the rate recorded in the same quarter of 2021.
This sector was driven in the fourth quarter of 2022 mainly by information and communication (telecommunication), trade, agriculture (crop production), financial and insurance (financial institutions), manufacturing (food, beverage & tobacco), real estate and construction, accounting for positive GDP growth.
By Adedapo Adesanya
Dangote Petroleum Refinery is preparing to raise about $5 billion through an initial public offering (IPO) expected to conclude in October, in what could become the largest stock market listing in Africa’s history.
The company has already submitted an initial application to the Securities and Exchange Commission (SEC), with approval expected in the coming weeks. Once authorised, the refinery is expected to release its prospectus in September ahead of the public offer.
The primary listing will be on the Nigerian Exchange (NGX) Limited, although investors across Africa are expected to participate through structured investment instruments rather than a dual listing.
The proceeds will be used to expand the capacity of the 700,000-barrels-per-day refinery in Lagos and possibly support plans to replicate the project in Kenya as Dangote seeks to deepen Africa’s energy independence.
The proposed IPO comes after the refinery benefited from increased demand for refined products during the recent Iran conflict, supplying jet fuel across Africa and into Western Europe as global shortages disrupted markets.
As per Reuters, stock exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have held discussions with advisers to the transaction as interest in the offering continues to build across the continent.
Kenya alone could account for as much as $500 million of the targeted capital raise, driven largely by demand from institutional investors, including pension funds, the publication reported.
While the company is targeting a $5 billion raise, the final amount will depend on the outcome of the SEC’s review. If achieved, the offering would represent more than four per cent of the Nigerian Exchange’s current market capitalisation.
The IPO follows a $2.5 billion private placement completed last month, in which a six per cent stake in the refinery was sold, implying a valuation of about $40 billion.
That valuation, however, would place the refinery well above several listed global refining companies. Turkey’s Tupras, which operates a similar combined refining capacity across four facilities, has a market value of roughly $12 billion, while US-listed HF Sinclair, with a comparable processing capacity, is valued at around $16 billion.
Although the NGX generally requires companies on its main board to maintain a minimum free float of 20 per cent, there have been exceptions. Dangote Cement, for instance, currently has a free float of just over 12 per cent.
The publication also reported that investors outside Nigeria are likely to gain exposure through instruments such as global depositary receipts or exchange-traded products linked to the Nigerian-listed shares, rather than through a cross-listing on other African exchanges.
The founder of the 700,000-barrels-per-day capacity plant, Mr Aliko Dangote, said in April that the refinery aims to increase production capacity to 1.4 million barrels per day.
Mr Dangote is also pursuing plans to build another refinery in Lamu along Kenya’s coast in partnership with other East African governments, although it remains unclear whether part of the IPO proceeds will be allocated to that project valued at an estimated $17 billion.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 0.89 per cent on Tuesday, August 4 amid renewed buying interest in unlisted stocks.
During the session, the market capitalisation added N24.07 billion to end at N2.739 trillion compared with Tuesday’s N2.715 trillion, while the NASD Security Index (NSI) gained 40.11 points to quote at 4,563.96 points compared with the preceding day’s 4,523.85 points.
The NASD OTC Exchange ended the trading session with two price losers and three gainers, led by Central Securities Clearing System (CSCS) Plc, which chalked up N7.80 to close at N119.80 per unit versus the previous session’s N112.00 per unit. Afriland Properties Plc increased its value by N1.27 to N23.95 per share from N22.68 per share, and Nitrox Industrial Gases Plc expanded by N1.15 to N21.15 per unit from N20.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc slid by N8.64 to sell at N144.00 per share compared with the previous day’s N152.64 per share, and 11 Plc dipped by 1 Kobo to end at N225.00 per unit, in contrast to Monday’s closing price of N225.01 per unit.
Tuesday’s trading data showed that the volume of securities rose by 9.0 per cent to 1.6 million units from 1.5 million units, and the number of deals climbed by 6.5 per cent to 33 deals from 31 deals, while the value of securities dropped by 26.9 per cent to N47.6 million from N65.2 million.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 76.9 million units exchanged for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date with 3.4 billion units transacted for N8.4 billion, followed by Infracredit Plc with 2.3 billion units sold for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
A 0.38 per cent loss was suffered by Nigerian stocks on Tuesday on the back of continued selling pressure from investors embarking on profit-taking.
Data from the Nigerian Exchange (NGX) Limited showed that the contraction was influenced by the 1.78 per cent decline recorded by the insurance sector, the 0.24 per cent slip printed by the consumer goods index, and the 0.09 per cent drop posted by the energy space, offsetting the 0.75 per cent growth achieved by the banking sector and the 0.21 per cent growth recorded by the industrial goods segment.
Investor sentiment was weak during the trading day, as the bourse ended with 13 price gainers and 40 price losers, representing a negative market breadth index.
LivingTrust Mortgage depreciated by 10.00 per cent to N3.42, Multiverse also shed 10.00 per cent to N22.95, McNichols dropped 9.92 per cent to N5.45, Thomas Wyatt dipped by 9.87 per cent to N3.56, and Eterna lost 8.57 per cent to trade at N33.00.
On the flip side, AVA Capital improved by 9.94 per cent to N9.95, Livestock Feeds expanded by 9.71 per cent to N8.65, Neimeth increased by 8.43 per cent to N9.00, AIICO gained 3.47 per cent to settle at N4.18, and Oando grew by 3.30 per cent to N36.00.
A total of 1.6 billion equities valued at N28.7 billion exchanged hands in 54,160 deals yesterday versus the 923.0 million equities worth N37.9 billion traded in 72,544 deals on Monday, indicating a 73.35 per cent surge in the trading volume, a 24.27 per cent decline in the trading value, and a 25.34 per cent slip in the number of deals.
The busiest stock was Japaul, which transacted 904.4 million units for N2.7 billion. Sterling Holdings sold 54.0 million units valued at N431.9 million, FCMB exchanged 49.5 million units worth N545.9 million, Chams traded 44.9 million units for N199.2 million, and Neimeth sold 42.4 million units worth N327.8 million.
Business Post reports that the All-Share Index (ASI) gave up 927.70 points to 244,802.83 points from 245,730.53 points, and the market capitalisation receded by N599 billion to N158.016 trillion from N158.615 trillion.
