Nigeria’s Economy Expands 3.89% In Q1 2026 As Telecoms, Trade Drive Growth Despite Weaker Oil Output
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Chidi Ugwu
Nigeria’s economy recorded a 3.89 per cent year-on-year growth in the first quarter of 2026, driven largely by strong performance in telecommunications, trade, construction and financial services, even as crude oil production declined during the period.
The latest Gross Domestic Product (GDP) report released by the National Bureau of Statistics showed that the growth rate was higher than the 3.13 per cent recorded in the corresponding period of 2025, indicating a moderate acceleration in economic activities across key non-oil sectors.
According to the report, the services sector remained the dominant contributor to the economy, accounting for 57.73 per cent of total GDP in real terms, slightly above the 57.50 per cent recorded in the first quarter of 2025.
The NBS disclosed that aggregate GDP at basic prices stood at N110.79 trillion in nominal terms during the quarter, representing a 17.79 per cent increase from N94.05 trillion recorded a year earlier.
The report showed that the non-oil sector remained the major engine of growth, expanding by 3.94 per cent in real terms and contributing 96.08 per cent to total GDP. The sector was propelled mainly by telecommunications, crop production, trade, cement manufacturing, financial institutions, real estate, construction and road transportation activities.
Telecommunications and information services emerged among the strongest growth drivers, with the Information and Communication sector recording a 10.98 per cent real growth rate year-on-year and contributing 11.31 per cent to real GDP.
Trade also maintained a strong footprint in the economy, contributing 17.89 per cent to GDP, while construction contributed 4.85 per cent after posting a real growth rate of 6.38 per cent.
Agriculture, which remains one of Nigeria’s largest employers, recorded real growth of 3.15 per cent compared to just 0.07 per cent in the same period last year, reflecting improved performance in crop production and livestock activities.
The manufacturing sector also improved, posting a 3.29 per cent real growth rate, up from 1.69 per cent in the first quarter of 2025, with cement, food and beverage production among the key contributors.
Despite the broader economic expansion, the oil sector continued to face production challenges. Average daily crude oil production fell to 1.55 million barrels per day in Q1 2026, lower than the 1.62 million barrels per day recorded in the corresponding quarter of 2025 and below the 1.58 million barrels per day achieved in the previous quarter.
Although the oil sector recorded a modest real growth of 2.57 per cent, its contribution to total real GDP declined slightly to 3.92 per cent from 3.97 per cent a year earlier.
The report also highlighted areas of weakness within the economy. Electricity, gas and air conditioning supply contracted sharply by 15.30 per cent in real terms, while “Other Services” declined by 1.96 per cent.
Financial and insurance services, however, remained among the fastest-growing sectors, recording 8.54 per cent real growth and 46.91 per cent nominal growth, reflecting increased activity in banking and insurance operations.
The NBS noted that the GDP figures were compiled from the Quarterly Establishment Survey conducted nationwide and are based on rebased estimates using 2019 constant prices.
