The Centre for the Promotion of Private Enterprise (CPPE) has commended Nigeria's first quarter 2026 gross domestic product (GDP) growth of 3.89 per cent, describing it as a reflection of continued macroeconomic stabilisation, improving business confidence, and the resilience of key non-oil sectors.
However, the CPPE warned that sustainable economic transformation cannot be driven by commerce alone. It emphasised that long-term growth resilience requires stronger productive capacity, deeper industrialisation, and significantly higher domestic value addition.
The National Bureau of Statistics (NBS) reported that the non-oil sector contributed 96.08 per cent to the nation's 3.89 per cent GDP growth in the first quarter of 2026. This share is higher than the 96.03 per cent recorded in the first quarter of 2025 but lower than the 97.13 per cent recorded in the fourth quarter of 2025. The services sector dominated non-oil contributions at 57.75 per cent, up 0.23 per cent from 57.50 per cent in Q1 2025.
Trade Sector Emerges as Largest Contributor
In a policy brief on the GDP report, CPPE Chief Executive Officer Dr. Muda Yusuf highlighted the emergence of the trade sector as the single largest contributor to GDP at 17.89 per cent. He attributed this to improved exchange rate stability, better foreign exchange liquidity conditions, easing inflationary pressures, and recovering business confidence.
Manufacturing Growth Below Potential
The manufacturing sector grew by 3.29 per cent, still below the 10 per cent benchmark. The CPPE noted that structural constraints such as high energy costs, elevated interest rates, weak infrastructure, logistics bottlenecks, and policy uncertainties continue to undermine industrial productivity and competitiveness. The centre stressed that the economy cannot achieve durable structural transformation without a stronger manufacturing base, calling industrialisation the most sustainable pathway to large-scale job creation, export competitiveness, and inclusive growth.
Electricity Sector Contracts Sharply
The CPPE described the sharp contraction of the electricity and gas sector by 15.30 per cent as the most troubling aspect of the report. This marks the steepest contraction recorded by the sector in recent years, underscoring the deepening fragility of Nigeria's power sector. The centre warned that electricity is not merely another economic sector but the foundation for productivity, industrialisation, competitiveness, and inclusive growth. A contraction of this magnitude signals persistent structural weaknesses across generation, transmission, and distribution, as well as continuing liquidity and governance challenges.
The implications for businesses are severe, as firms already burdened by high interest rates, logistics costs, and weak consumer purchasing power face further escalation of production costs. Heavy dependence on diesel and petrol-powered self-generation continues to erode profitability across manufacturing, SMEs, hospitality, agro-processing, and digital sectors.
The CPPE concluded that sustainable economic transformation cannot be built on fragile energy infrastructure. Without reliable, affordable, and stable electricity, gains recorded in other sectors may prove difficult to sustain. It called for accelerated reforms across the electricity value chain, including stronger investment in transmission infrastructure, improved market liquidity, accelerated metering, reduction in technical and commercial losses, and governance reforms to restore investor confidence.
While the GDP numbers are encouraging from a macroeconomic standpoint, concerns remain regarding the quality, inclusiveness, and welfare impact of growth. Weak electricity supply, modest industrial contribution, fragile oil output, and elevated operating costs continue to constrain employment generation, productivity, and household welfare. Economic growth must ultimately translate into improved living conditions, stronger purchasing power, and better welfare outcomes for citizens.
