Nigeria Economy Q1 2026: Best and Worst Performing Sectors as Growth Strengthens but Risks Persist
Nigeria’s economy is showing clearer signs of stability in 2026, with stronger macroeconomic indicators compared to the previous year. After two years of painful reforms, the country is gradually moving toward recovery, but the picture remains uneven beneath the surface.
According to data from the National Bureau of Statistics, Nigeria’s real GDP grew by 3.89% in Q1 2026, slightly higher than 3.13% recorded in the same period of 2025. The expansion was largely driven by agriculture, services, ICT, manufacturing, construction, transportation, and financial services. However, despite the positive direction, underlying vulnerabilities continue to shape the country’s economic outlook.
One of the strongest performers in the quarter was the services sector, which accounted for 57.73% of real GDP. ICT stood out with a sharp 10.98% growth, while telecommunications and information services expanded by 12.24%. Agriculture also showed notable improvement, rising by 3.15% compared to just 0.07% a year earlier, suggesting early signs of stronger food production capacity. Manufacturing followed with a 3.29% expansion, supported by cement, pharmaceuticals, and oil refining activity.
However, not all sectors shared in the momentum. Oil and gas remained weak, growing only 2.57%, while electricity, gas, steam, and air conditioning supply contracted sharply by 15.30%. This highlights a major structural challenge: Nigeria’s non-oil economy is driving GDP growth, but oil still dominates foreign exchange earnings and fiscal stability, creating a persistent imbalance in the recovery narrative.
Looking ahead, analysts note both opportunities and risks. Foreign reserves have strengthened close to $50 billion, non-oil revenue continues to improve, and sectors like ICT, agriculture, and manufacturing are gaining traction. Yet challenges remain, including low oil production below budget targets, tight monetary policy with high interest rates at 26.5%, weak consumer purchasing power, and an unreliable power sector that continues to drag on productivity and industrial expansion.
In conclusion, Nigeria enters the second half of 2026 in a better position than a year earlier, but the recovery is still fragile. While growth is visible in the data, its impact is yet to fully translate into improved living standards. The key question now is whether Nigeria can turn this uneven recovery into sustained and inclusive economic growth that benefits both businesses and households.
source: nairametrics