Nigeria’s Economy Grows 3.89% In Q1 2026 As Telecoms And Agriculture Lead Expansion, Electricity Sector Contracts

Nigeria’s Economy Grows 3.89% in Q1 2026 as Telecoms and Agriculture Lead Expansion, Electricity Sector Contracts Nigeria’s economy recorded a 3.89 per cent year-on-year growth in real GDP in the first quarter of 2026, driven mainly by strong performance in telecommunications, agriculture, financial services, trade, and construction, even as structural weaknesses in electricity supply and crude oil output continued to weigh on overall productivity.The latest figures released by the National Bureau of Statistics NBS show that economic activity remained resilient despite persistent inflationary pressures, energy shortages, and weak consumer purchasing power. The services sector remained the dominant engine of expansion, with telecommunications and information services emerging as the strongest-performing segment, growing by 10.98% year-on-year and increasing its contribution to GDP. Agriculture also posted a notable improvement, growing by 3.15% compared to just 0.07% in the same period of 2025, largely supported by crop production and improved rural economic activity.

Other key growth drivers included

• Financial and insurance services, which expanded by 8.54%
• Construction, which grew by 6.38%
• Manufacturing, which rose by 3.29%
• Trade, which remained the largest contributor at 17.89% of GDP, though growth slowed to 2.08% Despite the overall growth, the electricity sector recorded one of its weakest performances, contracting by 15.3% in real terms, reversing its earlier growth trajectory.The sector’s contribution to GDP also fell significantly to 0.28%, highlighting ongoing challenges in:
• Grid instability
• Gas supply shortages
• High operating and generation costs

Energy constraints were identified as a major drag on industrial productivity and investor confidenct. Nigeria’s oil sector continued to underperform, with average production falling to 1.55 million barrels per day, down from 1.62 million barrels per day in Q1 2025.Although the sector recorded modest real growth of 2.57%, its contribution to GDP remained relatively small at 3.92%, reflecting Nigeria’s ongoing shift toward non-oil economic activity. Overall, the services sector accounted for 57.73% of real GDP, confirming its position as the backbone of Nigeria’s economy.

• Telecommunications and ICT
• Financial services
• Trade activities

While growth improved compared to the 3.13% recorded in Q1 2025, analysts noted that the expansion remains modest relative to Nigeria’s population growth and development targets.

The economy continues to face

• High inflationary pressure
• Weak purchasing power
• Energy supply constraints
• FX and cost pressures on businesses

Despite challenges in oil and electricity, the Q1 2026 GDP performance reflects a gradual diversification of Nigeria’s economy, with stronger contributions from non-oil sectors such as agriculture, telecoms, and finance. However, sustained growth is expected to depend heavily on improvements in power supply stability, industrial productivity, and oil output recovery.