Nigeria’s economy began 2026 with stronger momentum, offering early signs that reforms introduced over the past two years may be gradually stabilizing Africa’s fourth-largest economy even as inflation, weak consumer purchasing power, and oil-sector fragility continue to cloud the outlook.
New data released by the National Bureau of Statistics showed that real Gross Domestic Product expanded by 3.89% year-on-year in the first quarter of 2026, up from 3.13% recorded in the same period of 2025.
The figures suggest the economy is maintaining moderate growth despite persistent pressures from high interest rates, elevated energy costs, and currency volatility that have weighed heavily on businesses and households since the implementation of major economic reforms under President Bola Tinubu.
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The latest growth numbers were largely powered by the non-oil economy, reinforcing a trend policymakers have long sought: reducing Nigeria’s dependence on crude exports and broadening growth across agriculture, telecommunications, finance, trade, and manufacturing.
Agriculture delivered one of the strongest turnarounds in the report. The sector grew by 3.15% in the first quarter, a sharp rebound from the near-flat 0.07% expansion recorded a year earlier. Analysts say the recovery points to improved farming activity in some regions, easing supply disruptions and stronger crop production after years of insecurity, flooding, and high input costs undermined output.
The services sector, which remains the backbone of the Nigerian economy, expanded by 4.31% and contributed 57.73% of total GDP, slightly higher than its share a year earlier. Telecommunications, financial services, real estate, and transportation were among the key drivers.
The continued dominance of services underscores how Nigeria’s economic structure is increasingly shifting toward digital and consumer-driven sectors, particularly telecommunications and financial technology. The Information and Communication sector, especially telecoms, remained one of the most important engines of growth as rising data consumption and digital payments continue to reshape commercial activity.
The industry sector also recorded modest improvement, growing by 3.50% compared with 3.42% in the corresponding quarter of 2025. Cement manufacturing and construction activity contributed to the gains, reflecting ongoing infrastructure spending and private sector building projects.
In nominal terms, aggregate GDP rose to N110.79 trillion in the first quarter, compared with N94.05 trillion a year earlier, representing nominal growth of 17.79%. However, economists caution that part of the increase reflects inflationary effects and exchange-rate adjustments rather than pure output expansion.
Nigeria continues to grapple with stubborn inflation, which has eroded household purchasing power and raised operating costs for businesses. While GDP growth has improved gradually, many Nigerians say the benefits are yet to translate into meaningful relief in food prices, transport costs, and living conditions.
One of the more notable aspects of the report was the relative resilience of the non-oil economy despite weaker crude production levels. Non-oil GDP grew by 3.94% in real terms, higher than the 3.19% recorded a year earlier, and accounted for 96.08% of total GDP.
That performance highlights how sectors outside petroleum are increasingly carrying the economy, particularly at a time when oil production remains constrained by underinvestment, pipeline vandalism, crude theft, and operational challenges.
Nigeria’s average crude oil production stood at 1.55 million barrels per day during the quarter, below the 1.62 million barrels recorded in the same period of 2025 and slightly below the previous quarter’s output.
Although the oil sector recorded real growth of 2.57%, up from 1.87% a year earlier, the pace slowed sharply from the 6.79% growth posted in the fourth quarter of 2025. The sector contributed just 3.92% to real GDP, underlining how limited its direct share of economic activity has become despite remaining Nigeria’s dominant source of foreign exchange earnings and government revenue.
The Mining and Quarrying sector posted mixed results. Nominal growth reached 13.92%, driven largely by crude petroleum and natural gas activities, which accounted for more than 91% of the sector’s weight. But in real terms, growth slowed to 1.89%, reflecting underlying production constraints.
The broader picture emerging from the data is that Nigeria’s economy is stabilizing gradually but unevenly. Reforms such as fuel subsidy removal, exchange-rate liberalization, and tighter monetary policy have improved investor sentiment and helped attract renewed foreign portfolio inflows, but they have also intensified short-term hardship for consumers and businesses.
The Central Bank of Nigeria has kept interest rates elevated in an attempt to contain inflation and stabilize the naira, while fiscal authorities are attempting to improve revenue collection and reduce deficits. Economists say sustaining growth above 4% consistently will require greater structural improvements, including stronger electricity supply, lower borrowing costs, improved security in food-producing regions, and increased domestic refining capacity to reduce import dependence.
The latest GDP figures nevertheless provide the clearest indication yet that Nigeria’s economy may be entering a more stable phase after years marked by currency shocks, oil-sector disruptions, and weak investor confidence. Economists believe much of the challenge now lies in converting macroeconomic recovery into broad-based improvements in employment, industrial output, and living standards.