Nigeria’s gross domestic product (GDP) expanded by 3.89% in real terms in the first quarter of 2026, buoyed by strong performances in telecommunications, financial services, trade and agriculture, even as the electricity sector contracted sharply and crude oil output remained weak, according to data released by the National Bureau of Statistics (NBS) on Monday.
Growth Outpaces Previous Year
The growth rate exceeded the 3.13% recorded in Q1 2025, indicating a modest strengthening of economic activity despite inflationary pressures, energy shortages and subdued consumer purchasing power. The latest reading continues a gradual upward trend, with annual growth reaching 3.38% in 2024 and accelerating to 3.87% last year. However, the pace remains modest relative to the Federal Government’s target of growing the economy to $1 trillion by 2030.
Nominal and Real GDP
Nominal GDP at basic prices rose to N110.79 trillion from N94.05 trillion in the corresponding period of 2025, representing year-on-year growth of 17.79%. Real GDP stood at N51.26 trillion. The wide gap between nominal and real growth reflects lingering inflationary effects on the economy.
Non-Oil Economy Leads
The Q1 2026 performance was driven largely by the non-oil sector, which grew by 3.94% compared with 3.19% in the same period last year. In contrast, the oil sector continued to underperform, reinforcing concerns about Nigeria’s inability to fully leverage its petroleum resources amid ongoing fiscal reforms.
Services Sector Dominates
The services sector remained the dominant engine of growth, accounting for 57.73% of real GDP and expanding by 4.31% year-on-year. Telecommunications and information services were standout performers, growing by 10.98% in real terms and increasing their GDP share from 10.59% to 11.31%. Trade was the single largest contributor to output at 17.89% of GDP, although its growth slowed to 2.08%, reflecting weak consumer demand and high operating costs.
Finance and Construction Growth
The finance and insurance sector posted real growth of 8.54%, supported by banking activities and higher transaction volumes following exchange-rate liberalisation and tighter monetary conditions. Construction expanded by 6.38%, indicating resilience in infrastructure and private building despite elevated borrowing costs.
Agriculture Improves
Agriculture delivered one of the quarter’s most notable improvements, growing by 3.15% compared with just 0.07% in Q1 2025. Crop production remained the key driver, helping stabilise rural economic activity amid food inflation and insecurity in parts of the country.
Industrial Sector
The industrial sector grew by 3.5%, slightly above the 3.42% recorded a year earlier. Manufacturing expanded by 3.29%, driven by cement production and food processing, despite energy constraints and rising input costs.
Electricity Sector Contracts
One of the weakest spots was the electricity sector, which contracted sharply by 15.3% in real terms, reversing the 18.65% growth recorded in Q1 2025. Its contribution to GDP fell to 0.28%. The decline highlights structural challenges in the power sector, including grid instability, gas supply shortages and high energy costs.
Oil Sector Under Pressure
Nigeria’s oil sector remained under pressure. Average daily crude production declined to 1.55 million barrels per day (mbpd) in Q1 2026 from 1.62 mbpd in Q1 2025 and 1.58 mbpd in the previous quarter. Although the sector recorded real growth of 2.57% due to favourable base effects, its GDP contribution slipped marginally to 3.92% from 3.97% a year earlier.
Outlook
Compared with Q1 2025, the latest GDP figures reveal a more diversified growth pattern, with stronger contributions from agriculture, telecommunications, finance and construction. However, the improvement remains modest when weighed against Nigeria’s development challenges and population growth, which continues to outpace economic expansion on a per capita basis.
