Nigeria’s Gross Domestic Product (GDP) rose by 3.13% year-on-year in real terms during the first quarter of 2025, marking a notable rebound from the 2.27% growth recorded in Q1 2024.
This is according to the latest report released by the National Bureau of Statistics (NBS), which attributes the improved performance to the strength of the services and industry sectors, as well as a broader recalibration of national accounts.
In nominal terms, the economy expanded to N94.05 trillion in Q1 2025, up from N79.51 trillion in the same quarter of 2024, representing a year-on-year increase of 18.30%.
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The Q1 2025 data is the first GDP report issued following the successful rebasing of Nigeria’s national accounts from a 2010 base year to 2019. The rebasing exercise, which economists say was long overdue, aligns Nigeria’s GDP calculations with more current economic realities and ensures better measurement of emerging industries such as digital services and creative sectors.
Services Sector Anchors Growth
The services sector maintained its dominance, growing by 4.33% in real terms and accounting for 57.50% of total GDP. Telecommunications and Information Services stood out, growing by 7.40% and contributing 10.59% to real GDP—an increase from 10.17% in Q1 2024. The sector’s performance reflects the ongoing digital shift across various parts of the economy, from financial services to education and media.
Finance and Insurance also delivered a robust performance, expanding by 15.03% year-on-year. This was largely driven by fintech innovations, rising digital adoption, and deeper financial inclusion efforts that have widened access to formal banking. The sector’s efficiency has improved with technology-backed customer onboarding and transaction processing, which analysts say is also reshaping the labor structure in banking.
Trade, Transportation, and Real Estate were also solid contributors. The trade sector grew by 1.78%, accounting for 18.21% of GDP. Transportation, one of the fastest-growing segments in the quarter, jumped by 14.08%, lifted by improvements across road, rail, air, water, and pipeline transport. Real estate posted 4.61% growth, reflecting a mix of ongoing commercial property projects and residential demand.
Industrial Output Rises, Oil Sector Slows
The industry sector grew by 3.42% year-on-year, improving on the 2.35% posted in Q1 2024. Within this, oil production averaged 1.62 million barrels per day (mbpd), slightly higher than the 1.57 mbpd produced in Q1 2024. However, real GDP growth in the oil sector dropped to 1.87%, down sharply from 4.71% in the corresponding quarter last year. Its share of the economy declined marginally to 3.97% from 4.02%.
Manufacturing, meanwhile, showed signs of stability and gradual rebound. It grew by 1.69% in real terms, supported by sub-sectors such as Food, Beverage, and Tobacco (3.48%), Cement (4.94%), and Pharmaceuticals (5.33%). The manufacturing sector contributed 9.62% to GDP, a reflection of ongoing industrial recovery despite cost pressures tied to energy and foreign exchange.
The construction industry recorded 6.21% growth, driven by infrastructure investments and increased activity in both private and public sector building projects.
Agriculture Still Trails Behind
Agriculture, which employs the largest share of Nigeria’s working population, remained the weakest of the three major sectors. It grew by just 0.07% in real terms, an improvement from the -1.79% contraction in Q1 2024, but still far below expectations. Crop production rose 3.71%, but livestock, forestry, and fishing delivered weaker or mixed results. Security challenges in key agricultural zones, poor mechanization, and post-harvest losses continue to limit the sector’s growth.
In nominal terms, agriculture contributed 19.40% to GDP, down from 20.86% a year earlier, underscoring its declining weight in the country’s overall economic mix.
Emerging Sectors Register Strong Gains
Several niche sectors recorded significant real growth, signaling ongoing structural transformation in the economy. The Electricity, Gas, Steam, and Air Conditioning Supply sector grew by a staggering 18.65%, up from just 2.49% in Q1 2024. This jump may be partly attributed to improved power generation and gas supply activities under the government’s energy reforms.
Water Supply, Sewerage, and Waste Management grew 9.43%, while the Arts, Entertainment and Recreation sector expanded by 9.63%, reflecting the global rise of Nigerian music, film, and gaming industries.
Accommodation and Food Services also advanced by 2.65%, while Public Administration recorded a modest 1.83% growth.
On the downside, Other Services contracted sharply by 6.13%, and Professional, Scientific and Technical Services slowed to 2.53%, from 5.71% in Q1 2024. The latter’s decline may reflect broader global debates around the impact of Artificial Intelligence on white-collar productivity.
Broader Economic Outlook
The Q1 2025 GDP performance underscores a cautiously optimistic economic trajectory, despite concerns about inflation, interest rates, and public sector borrowing. Analysts believe the rebasing offers a more accurate window into Nigeria’s evolving economy, and that the strong performance in services and industry gives policymakers a clearer path to foster growth.
However, with agriculture lagging and oil underperforming, long-term structural reforms remain vital to achieving inclusive growth. There are also broader calls for fiscal and monetary coordination to tackle rising unemployment and ensure that the gains in GDP translate to tangible improvements in household income and welfare.