Nigeria’s economy is expected to maintain a moderately positive growth trajectory in 2026, with GDP expansion of 4.1 per cent, slightly above the 3.86 per cent forecast for 2025.

According to Cowry Asset Management Limited, the anticipated growth is supported by a combination of improved domestic oil production, ongoing policy reforms, and steady expansion in key non-oil industries such as telecommunications, financial services, construction and trade, which continue to provide a critical buffer against global uncertainties.

The firm noted that while the outlook is broadly positive, structural challenges remain a significant constraint on the economy’s full potential.

According to the company, high production costs, persistent infrastructure gaps, fluctuating oil output and tight domestic liquidity conditions are expected to limit the pace of growth, requiring careful policy management and targeted interventions to sustain momentum.

In addition, the firm emphasised that the non-oil sector will likely remain the primary driver of economic performance in 2026. Agriculture is expected to benefit from seasonal improvements and government-led initiatives designed to boost output, while the services sector, including finance, telecommunications, and trade, continues to expand steadily.

Cowry Research also pointed out that the oil sector, despite recent volatility, is anticipated to make a positive contribution to overall GDP, driven by rising domestic production and ongoing investments in upstream operations, which are gradually enhancing capacity and output.

Cowry Research further highlighted that risks remain, particularly from global oil price fluctuations, inflationary pressures, and external sector imbalances, which could weigh on near-term economic momentum.

Nonetheless, the firm emphasised that the combination of strategic policy reforms, infrastructure investments and diversification into non-oil industries provides a foundation for a stable and cautiously optimistic growth path for the Nigerian economy in the coming year.

Latest data from the National Bureau of Statistics (NBS), Nigeria’s economy demonstrated solid growth in the third quarter of 2025, with real Gross Domestic Product (GDP) increasing by 3.98 per cent year-on-year.

This represents a modest deceleration from the 4.23 per cent growth recorded in Q2 2025 but remains above the 3.86 per cent growth posted in Q3 2024.

The expansion was supported by strong performances in agriculture, trade, information and communications, financial and insurance services, and construction. The slight slowdown followed the rebasing of the national accounts to a 2019 base year and marked another strong quarterly performance since 2021.

The NBS data showed that growth in Q3 2025 was underpinned by both the oil and non-oil sectors. The oil sector grew by 5.84 per cent year-on-year, up 0.18 percentage points from Q3 2024, although it fell 14.62 per cent from Q2 2025 due to weaker crude output caused by a three-day strike and maintenance at key terminals.

Average production rose to 1.64 million barrels per day from 1.47 million barrels in Q3 2024, slightly below Q2’s 1.68 million barrels per day, with the sector contributing 3.44 per cent to GDP.

Meanwhile, the non-oil sector, which remains the dominant driver of the economy, expanded 3.91 per cent year-on-year, led by crop production, telecoms, real estate, financial services, trade, construction, and manufacturing. The sector accounted for 96.56 per cent of GDP, marginally below Q3 2024’s 96.62 per cent but higher than Q2 2025’s 95.95 per cent.

According to Cowry, sustaining this growth trajectory will require not only continued investment in key sectors but also structural reforms that address the underlying bottlenecks in production, logistics, and liquidity.

With coordinated policy measures and proactive sectoral support, Nigeria is positioned to gradually strengthen its economic performance, ensuring that growth is both inclusive and resilient in the face of domestic and global uncertainties.