The Centre for the Promotion of Private Enterprise (CPPE), has hailed the first quarter 2026 gross domestic product (GDP) growth of 3.89 per cent, describing it as a reflection of continued macroeconomic stabilisation, improving business confidence, and the resilience of key non-oil sectors.

It however, said sustainable economic transformation cannot be driven by commerce alone, noting that long-term growth resilience requires stronger productive capacity, deeper industrialisation and significantly higher domestic value addition.

The National Bureau of Statistics (NBS) had reported that the non-oil sector has continued to dominate contributions to Nigeria’s GDP, contributing 96.08 per cent to the nation’s 3.89 per cent GDP growth recorded in the first quarter of 2026.

The 96.08 per cent is higher than the share recorded in the first quarter of 2025, which was 96.03 per cent, but lower than the fourth quarter of 2025 which recorded 97.13 per cent. The non-oil sector contribution was dominated by the services sector which contributed 57.75 per cent. This contribution is 0.23 per cent higher than its contribution in the first quarter of 2025 which was 57.50 per cent.

The CPPE in a policy brief on the GDP report, signed by its Chief Executive Officer, Dr Muda Yusuf, said one of the most significant highlights of the report is the emergence of the trade sector as the single largest contributor to GDP at 17.89 per cent. “This reflects the positive effects of improved exchange rate stability, better FX liquidity conditions, easing inflationary pressures and recovering business confidence on commercial activities and trade flows”, it said.

The manufacturing sector growth of 3.29 per cent, which is still below 10 per cent, it said, highlights the continuing structural constraints confronting the industrial sector. “High energy costs, elevated interest rates, weak infrastructure, logistics bottlenecks and policy uncertainties continue to undermine industrial productivity and competitiveness”, it noted, adding that the economy cannot achieve durable structural transformation without a stronger manufacturing base. “Industrialisation remains the most sustainable pathway to large-scale job creation, export competitiveness and inclusive growth.”

CPPE observed that the most troubling aspect of the report is the sharp contraction of the electricity/gas sector by 15.30 per cent, making it the weakest-performing sector in the quarter and the steepest contraction recorded by the sector in recent years.

It said, “This underscores the deepening fragility of Nigeria’s power sector and raises serious concerns about the sustainability of economic growth, industrial productivity and business competitiveness.
“This development is concerning because electricity is not merely another economic sector; it is the foundation upon which productivity, industrialization, competitiveness and inclusive growth depend. A contraction of this magnitude signals persistent structural weaknesses across generation, transmission and distribution, as well as continuing liquidity and governance challenges within the power sector.”

The centre noted that the implications for businesses are severe. “At a time when firms are already burdened by high interest rates, logistics costs and weak consumer purchasing power, deteriorating electricity supply further escalates production costs and weakens competitiveness”, it said, adding, “Heavy dependence on diesel and petrol-powered self-generation continues to erode profitability across the manufacturing, SME, hospitality, agro-processing and digital sectors.

“Sustainable economic transformation cannot be built on fragile energy infrastructure. Without reliable, affordable and stable electricity, gains recorded in other sectors may prove difficult to sustain.
“This underscores the urgent need for accelerated reforms across the electricity value chain, including stronger investment in transmission infrastructure, improved market liquidity, accelerated metering, reduction in technical and commercial losses, and governance reforms that can restore investor confidence in the sector.

“While the GDP numbers are encouraging from a macroeconomic standpoint, concerns remain regarding the quality, inclusiveness, and welfare impact of growth.

“Weak electricity supply, modest industrial contribution, fragile oil output, and elevated operating costs continue to constrain employment generation, productivity, and household welfare.

Economic growth must ultimately translate into improved living conditions, stronger purchasing power, and better welfare outcomes for citizens. Growth without inclusion delivers limited economic and social dividends.”