Analysts at CardinalStone are projecting Nigeria’s GDP in H2 2025 to grow at its fastest pace since 2014, fueled largely by renewed activity in the oil and gas sector.

The forecast was detailed in their mid-year economic outlook titled “Charting the Sustainability Path”, released on July 7.

According to the report, GDP growth is expected to be driven by a revitalized oil and gas sector, supported by the full-scale operations of the Dangote Refinery.

Highlighting the role of inflation in shaping this outlook, the analysts noted:

“Real growth is also expected to reflect sustained moderation of inflation to 20.0% from an average of 33.0% in 2024.”

They added that a more stable exchange rate environment would further support growth by easing pressure on consumer spending and reducing corporate cost burdens.

Regarding sector preferences for the second half of the year, CardinalStone favored upstream oil and gas, naming SEPLAT and ARADEL as their top picks with buy recommendations.

According to the analysts, their bullish view on SEPLAT and ARADEL stems from the strength and expected profitability of recent strategic transactions by both companies.

SEPLAT revealed an 11% increase in total production following its acquisition of Mobil Producing Nigeria Unlimited (MPNU)—now renamed Seplat Energy Producing Nigeria Unlimited (SEPNU)—in late 2024.

Analysts believe this consolidation will meaningfully boost SEPLAT’s production capacity and reserves profile in the second half of the year.

For ARADEL, the analysts stated:

“We are optimistic about the earnings upside from Renaissance Africa Energy Company consortium, which should support ARADEL’s earnings via ‘share of profit of an associate.’”

The consortium, which includes ARADEL alongside other Nigerian and international energy players, completed the acquisition of Shell Petroleum Development Company of Nigeria (SPDC) in March 2025.

Despite these positive company-specific developments, the broader oil and gas sector declined by 10.12% on the Nigerian stock market in the first half of 2025.

The Nigerian Oil and Gas sector, as tracked by the NGX Oil and Gas Index, saw a challenging first half of 2025—closing lower in five out of six months.

The index opened the year at 2,712.1 points but declined steadily through May, falling to 2,327.2 and shedding 384.9 points in the process.

June brought a shift in momentum, with the sector posting a 4.7% gain and closing the month at 2,437.5, supported by a market volume of 538 million.