Nigeria’s Economy Grows 3.89% in Q1 2026 as Services Sector Leads Expansion

Nigeria’s economy expanded by 3.89 percent year-on-year in real terms in the first quarter (Q1) of 2026, according to the latest Gross Domestic Product report released by the National Bureau of Statistics.

The growth rate was stronger than the 3.13 percent recorded in the corresponding period of 2025, indicating continued resilience in the non-oil economy despite weaker crude oil production and ongoing macroeconomic challenges.

The NBS report showed that aggregate GDP at basic prices stood at N110.79 trillion in nominal terms during the quarter, representing a nominal year-on-year increase of 17.79 percent from N94.05 trillion recorded in Q1 2025.

The services sector remained the largest contributor to economic activity, accounting for 57.73 percent of total GDP in the first quarter of 2026, slightly higher than the 57.50 percent recorded in the same period of last year.

According to the report, agriculture grew by 3.15 percent in real terms during the quarter, an improvement from the marginal 0.07 percent growth recorded in Q1 2025.

Industry growth stood at 3.50 percent compared to 3.42 percent in the corresponding quarter of 2025 while the services sector expanded by 4.31 percent.

The non-oil sector continued to dominate economic activity, contributing 96.08 percent to real GDP in Q1 2026 while recording a growth rate of 3.94 percent year-on-year.

NBS attributed the non-oil sector performance mainly to growth in telecommunications, crop production, trade, cement manufacturing, financial institutions, construction, transportation and real estate activities.

The telecommunications and information services sector remained one of the fastest-growing segments of the economy with real growth of 10.98 percent year-on-year and contribution of 11.31 percent to total real GDP.

The finance and insurance sector also posted strong performance with nominal growth of 46.91 percent and real growth of 8.54 percent during the quarter as banking sector activities continued to benefit from elevated interest rates and financial market expansion.

Trade remained the single largest contributor to GDP at 17.89 percent, followed closely by crop production at 17.38 percent and real estate at 13.10 percent.

Telecommunications contributed 9.19 percent while construction accounted for 4.85 percent of total real GDP.

Meanwhile, the oil sector recorded slower growth as average daily crude oil production declined to 1.55 million barrels per day in Q1 2026 from 1.62 million barrels per day in the same quarter of 2025.

Despite the lower production volume, the oil sector recorded real growth of 2.57 percent year-on-year compared to 1.87 percent in the corresponding quarter of last year.

However, its contribution to real GDP declined slightly to 3.92 percent from 3.97 percent in Q1 2025.

Analysts said the latest GDP figures indicate continued resilience in Nigeria’s services-driven economy but warned that weaker oil production, high inflation, currency volatility and infrastructure challenges could continue to weigh on broader economic expansion in the coming quarters.

The report also highlighted sharp contractions in the electricity sector, where real growth fell by 15.30 percent year-on-year.

Overall, the latest GDP data reinforces the growing importance of non-oil sectors in sustaining economic growth as Nigeria continues efforts to diversify its economy away from crude oil dependence.