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LAGOS – Nigeria’s economy expanded by 3.89 percent year-on-year in the first quarter of 2026, but the pace of growth slowed slightly from the 4.07 percent recorded in the preceding quarter, reflecting persistent structural challenges in the oil sector and broader macroeconomic pressures.
The latest Gross Domestic Product (GDP) report released Monday by the National Bureau of Statistics showed that the economy still recorded a stronger performance compared to the 3.13 percent growth achieved in the corresponding period of 2025, underscoring continued resilience in non-oil sectors despite elevated inflation, high borrowing costs and weak consumer purchasing power.
According to the report, aggregate nominal GDP rose to N110.78 trillion in Q1 2026 from N94 trillion in Q1 2025, representing a nominal growth of 17.79 percent, while real GDP stood at N51.26 trillion during the period under review.
The statistics agency attributed the expansion largely to sustained growth in the services sector and improving agricultural activities, even as crude oil production weakened.
The NBS said: “During the quarter under review, agriculture grew by 3.15 percent, an improvement from the 0.07 percent recorded in the corresponding quarter of 2025.
“The growth of the industry sector stood at 3.50 percent from 3.42 percent recorded in the first quarter of 2025, while the services sector recorded a growth of 4.31 percent from 4.33 percent in the same quarter of 2025.”
The services sector remained the dominant driver of economic activities, contributing 57.73 percent to aggregate GDP, slightly higher than the 57.50 percent recorded in Q1 2025.
Further breakdown of the data showed that Information and Communication grew by 10.98 percent, while Financial and Insurance services expanded by 8.54 percent, reinforcing the increasing importance of digital services and banking activities in supporting growth.
Analysts said the latest GDP figures point to an economy that is gradually stabilising under ongoing reforms, but still constrained by structural weaknesses, especially in the oil sector.
Economists noted that the moderation in quarterly growth from 4.07 percent in Q4 2025 to 3.89 percent in Q1 2026 suggests that underlying fragilities remain, particularly around energy production, inflationary pressures and weak industrial productivity.
Analysts at investment firms said the out-turn came broadly in line with market expectations, reflecting stronger contributions from non-oil sectors.
They observed that the non-oil economy continued to carry the burden of growth, accounting for over 96 percent of total GDP, while the oil sector remained relatively weak despite modest year-on-year improvement.
According to analysts, the rebound in agriculture was one of the most significant highlights of the report, given the sector’s weak 0.07 percent growth in the same period last year.
They attributed the improvement to better crop production and relative stability in some farming regions, although insecurity and high transportation costs continue to weigh on food production nationwide.
The industry sector also posted a modest improvement to 3.50 percent growth, reflecting a gradual recovery in manufacturing and construction activities amid improved foreign exchange liquidity and easing supply-chain disruptions.
However, the oil sector remained a major concern.
The NBS disclosed that Nigeria’s average daily crude oil production fell to 1.55 million barrels per day (mbpd) in Q1 2026, lower than the 1.62mbpd recorded in Q1 2025 and below the 1.58mbpd achieved in Q4 2025.
The bureau said the oil sector grew by 2.57 percent year-on-year in Q1 2026, an improvement from the 1.87 percent recorded in the corresponding quarter of 2025, but significantly lower than the 6.79 percent growth posted in Q4 2025.
The sector contributed 3.92 percent to total real GDP during the period, slightly below the 3.97 percent contribution recorded in Q1 2025.
Economic analysts linked the slowdown in oil growth to persistent crude theft, pipeline vandalism, ageing infrastructure and lower investment in upstream operations.
They warned that Nigeria’s inability to significantly ramp up crude production continues to limit the economy’s growth potential and foreign exchange.
