Nigeria’s gross domestic product (GDP) expanded by 3.89 per cent in real terms in the first quarter of 2026, as gains in telecommunications, financial services, trade and agriculture helped to cushion persistent weaknesses in crude oil production and electricity supply.

The growth was blighted by the electricity sector, which shrank by 15.3 per cent, underscoring its lacklustre performance. Its contribution to the output level declined sharply to 0.28 per cent.

Data released on Monday by the National Bureau of Statistics showed that the growth rate exceeded the 3.13 per cent recorded in Q1 2025, underscoring a modest strengthening in economic activity despite inflationary pressures, energy shortages and subdued consumer purchasing power.

The latest reading also extends a gradual upward trend in annual growth, with the economy seeing 3.38 per cent in 2024 before accelerating to 3.87 per cent last year.

However, the current growth pace remains modest relative to the Federal Government’s target of growing Nigeria’s economy to $1 trillion by 2030.

Nominal GDP at basic prices rose to N110.79 trillion from N94.05 trillion in the corresponding period of 2025, representing year-on-year growth of 17.79 per cent.

Real GDP stood at N51.26 trillion. The wide difference between nominal and real growth reflects the lingering impact of inflation on the economy.

The Q1 2026 performance was driven largely by the non-oil economy, which grew by 3.94 per cent, compared with 3.19 per cent in the same period last year.

By contrast, the oil sector continued to underperform, reinforcing concerns about Nigeria’s inability to fully leverage its petroleum resources amid ongoing fiscal reforms.

The services sector retained its position as the dominant engine of growth, accounting for 57.73 per cent of real GDP and expanding by 4.31 per cent year-on-year.

Telecommunications and information services emerged as the standout performer, growing by 10.98 per cent in real terms and increasing its share of GDP from 10.59 per cent to 11.31 per cent.

Trade remained the single largest contributor to output at 17.89 per cent of GDP, although its growth slowed to 2.08 per cent, below historical averages, reflecting weak consumer demand and high operating costs for businesses.

The finance and insurance sector posted real growth of 8.54 per cent, supported largely by banking activities and higher transaction volumes in the financial system following exchange-rate liberalisation and tighter monetary conditions.

Construction also recorded stronger momentum, expanding by 6.38 per cent, an indication that infrastructure and private building activities remained resilient despite elevated borrowing costs.

Agriculture delivered one of the quarter’s most notable improvements, growing by 3.15 per cent compared with the 0.07 per cent growth recorded in Q1 2025.

Crop production remained the key driver, helping stabilise rural economic activity amid lingering food inflation and insecurity in parts of the country.

The industrial sector grew by 3.5 per cent, slightly above the 3.42 per cent recorded a year earlier. Manufacturing expanded by 3.29 per cent, driven by cement production and food processing, despite continued energy constraints and rising input costs.

One of the quarter’s weakest spots was the electricity sector, which contracted sharply by 15.3 per cent in real terms, reversing the 18.65 per cent growth recorded in Q1 2025. Its contribution to GDP fell to 0.28 per cent.

The decline highlights the structural challenges within Nigeria’s power sector, where persistent grid instability, gas supply shortages and high energy costs continue to undermine industrial productivity and investment confidence.

Nigeria’s oil sector also remained under pressure. Average daily crude production declined to 1.55 million barrels per day in Q1 2026 from 1.62 mbpd in Q1 2025 and 1.58 mbpd in the preceding quarter.

Although the sector recorded real growth of 2.57 per cent due largely to favourable base effects, its contribution to GDP slipped marginally to 3.92 per cent from 3.97 per cent a year earlier, underscoring the economy’s continued shift away from oil dependence.

Compared with Q1 2025, the latest GDP figures reveal a more diversified growth pattern, with stronger contributions from agriculture, telecommunications, finance and construction. However, the improvement remains modest when weighed against the scale of Nigeria’s development challenges and population growth, which continues to outpace economic expansion on a per capita basis and the Federal Government’s target to achieve a $1 trillion economy by 2030.