By Ayo Kehinde
Nigeria’s economy expanded by 3.89 percent year-on-year in real terms in the first quarter of 2026, signalling a stronger economic performance compared to the 3.13 percent growth recorded in the corresponding period of 2025, according to the latest Gross Domestic Product (GDP) report released by the National Bureau of Statistics.
The report, released on Monday, showed that the nation’s economic growth in the review period was driven largely by improved performance in agriculture, telecommunications, financial services, manufacturing, trade, construction and transportation, despite continued pressure from inflation, foreign exchange instability and declining crude oil production.
The NBS said the services sector remained the dominant contributor to the economy, accounting for 57.73 percent of aggregate GDP in Q1 2026, higher than the 57.50 percent recorded in the corresponding quarter of 2025.
The latest figures indicate a broad-based, though uneven, recovery across major sectors of the economy, with agriculture emerging as one of the strongest growth drivers during the quarter.
According to the report, the agricultural sector recorded a real growth rate of 3.15 percent in Q1 2026, representing a significant improvement from the marginal 0.07 percent growth posted in Q1 2025.
Analysts say the sharp rebound in agriculture may reflect improved farming activities, better output in crop production and gradual recovery in food supply chains after prolonged disruptions caused by insecurity, flooding and rising production costs in several farming communities across the country.
The industry sector also posted moderate improvement during the review period, growing by 3.50 percent compared to the 3.42 percent growth recorded in the corresponding quarter of 2025.
Meanwhile, the services sector expanded by 4.31 percent in Q1 2026, slightly lower than the 4.33 percent recorded in the same quarter of the previous year, but still maintaining its position as the biggest contributor to Nigeria’s economic output.
In nominal terms, aggregate GDP at basic prices stood at ₦110.79 trillion during the first quarter of 2026, compared to ₦94.05 trillion recorded in Q1 2025.
The NBS said this represented a year-on-year nominal growth of 17.79 percent, reflecting increased economic activities and prevailing price levels across sectors of the economy.
Despite the overall economic expansion, the oil sector continued to experience production challenges during the quarter under review.
According to the Bureau, Nigeria recorded an average daily crude oil production of 1.55 million barrels per day (mbpd) in Q1 2026, lower than the 1.62 mbpd recorded in the same period of 2025 and also below the 1.58 mbpd posted in the fourth quarter of 2025.
The report stated that the oil sector grew by 2.57 percent year-on-year in real terms during the quarter, an increase of 0.70 percentage points relative to the 1.87 percent growth recorded in Q1 2025.
However, the sector’s growth performance weakened significantly when compared to the fourth quarter of 2025, when it recorded a stronger growth rate of 6.79 percent.
On a quarter-on-quarter basis, the oil sector recorded a growth rate of 9.31 percent in Q1 2026.
The oil sector contributed 3.92 percent to total real GDP during the period under review, slightly lower than the 3.97 percent contribution recorded in the corresponding quarter of 2025, but higher than the 2.87 percent contribution recorded in the preceding quarter.
Economic analysts attributed the weak oil production figures to persistent challenges in the sector, including pipeline vandalism, crude theft, underinvestment and operational constraints affecting production capacity.
The report further showed that the non-oil sector remained the major driver of economic activities in the country.
According to the NBS, the non-oil sector grew by 3.94 percent in real terms in Q1 2026, higher than the 3.19 percent recorded in the corresponding quarter of 2025, though slightly lower than the 3.99 percent recorded in the fourth quarter of 2025.
The Bureau noted that the non-oil economy was driven mainly by strong performances in Information and Communication, particularly telecommunications; agriculture, especially crop production; trade; cement manufacturing; financial institutions; real estate; construction; and transportation and storage, especially road transport services.
In real terms, the non-oil sector contributed 96.08 percent to the nation’s GDP in Q1 2026, slightly higher than the 96.03 percent contribution recorded in the first quarter of 2025, although lower than the 97.13 percent contribution posted in Q4 2025.
Economic experts say the latest GDP figures suggest that Nigeria’s economy is gradually deepening its dependence on non-oil activities amid sustained volatility in global crude oil markets and domestic production challenges. They, however, cautioned that the stronger GDP growth figures may not immediately translate into improved living conditions for many Nigerians facing rising food prices, high transportation costs, currency depreciation and declining purchasing power.
Nigeria’s inflationary environment has remained one of the major concerns confronting households and businesses, with food inflation continuing to strain consumer spending and worsen poverty levels across the country.
The latest GDP report comes amid ongoing economic reforms by the Federal Government aimed at stabilising the foreign exchange market, improving public finances, attracting investment and boosting productivity in critical sectors of the economy.
Market observers say sustaining growth above 3.5 percent will require stronger investment in infrastructure, improved security in agricultural regions, stable energy supply, increased industrial productivity and reforms capable of expanding employment opportunities. They also stressed the need for increased crude oil production and improved fiscal management to strengthen government revenues and support long-term macroeconomic stability.
