NBS Reports 3.89% GDP Growth Amid Services, Non-Oil Sector Expansion

By Jennete Ugo Anya

Nigeria’s Gross Domestic Product (GDP) grew by 3.89 percent year-on-year in real terms in the first quarter of 2026, according to figures released by the National Bureau of Statistics (NBS).

The growth represents an increase from the 3.13 percent recorded in the corresponding period of 2025, although it reflects a slight moderation from the 4.07 percent growth reported in the fourth quarter of 2025.

According to the NBS, agriculture expanded by 3.15 percent compared with 0.07 percent in the first quarter of 2025, while the industry sector recorded growth of 3.50 percent from 3.42 percent.

The services sector grew by 4.31 percent and remained the dominant contributor to economic output, accounting for 57.73 percent of aggregate GDP.

The NBS also stated that the non-oil sector grew by 3.94 percent and contributed 96.08 percent to total GDP during the quarter.

DECISION HIGHLIGHT

Nigeria’s first-quarter growth performance indicates continued economic expansion driven primarily by services and non-oil activities despite slower quarterly momentum and persistent structural pressures.

The figures also reinforce the increasing role of non-oil sectors within Nigeria’s broader economic output structure.

DECISION MEMO

The latest GDP figures reflect a complex but gradually stabilising economic environment in which Nigeria’s growth trajectory is increasingly being shaped by services, agriculture and non-oil commercial activity rather than hydrocarbon dominance alone.

The improvement from 3.13 percent growth in the first quarter of 2025 to 3.89 percent in the corresponding period of 2026 suggests underlying economic activity has strengthened despite elevated inflationary pressures, exchange-rate adjustments and financing constraints across multiple sectors.

However, the decline from 4.07 percent growth recorded in the fourth quarter of 2025 also indicates that momentum within the economy remains uneven.

The strongest structural signal within the report remains the dominance of the non-oil economy.

According to the NBS, non-oil activities accounted for 96.08 percent of total GDP in the first quarter, reinforcing the continued expansion of sectors outside crude oil production.

The services sector remained the largest growth anchor, contributing 57.73 percent to aggregate GDP.

That trend reflects increasing economic dependence on telecommunications, financial services, trade, logistics and broader commercial activity as drivers of national output.

Equally significant is the rebound within agriculture.

Agricultural growth accelerated to 3.15 percent from just 0.07 percent in the same period of 2025, suggesting improving resilience within food production and rural economic activity despite persistent security, climate and infrastructure challenges affecting the sector.

The oil sector, while improving modestly year-on-year, continues to play a comparatively smaller role within overall output composition.

Oil sector growth rose to 2.57 percent from 1.87 percent in the corresponding quarter of 2025, but the sector contributed only 3.92 percent to real GDP.

That relatively limited contribution highlights the continuing structural shift within Nigeria’s economy, where hydrocarbons remain fiscally and externally significant but less dominant within aggregate output measurement.

The slower quarterly oil growth compared with the 6.79 percent recorded in the fourth quarter of 2025 also suggests continuing production and operational volatility within the sector.

More broadly, the figures suggest that Nigeria’s current economic expansion remains consumption and services-led rather than industrially transformative.

While headline growth has strengthened, structural constraints including inflation, high operating costs, weak industrial productivity and infrastructure deficits continue limiting stronger acceleration.

The broader implication is that sustaining higher growth levels will likely depend on whether current non-oil expansion can translate into deeper productivity gains, employment generation and industrial capacity growth over the medium term.

DATA BOX

• Q1 2026 GDP Growth: 3.89 percent
• Q1 2025 GDP Growth: 3.13 percent
• Q4 2025 GDP Growth: 4.07 percent
• Agriculture Growth Q1 2026: 3.15 percent
• Agriculture Growth Q1 2025: 0.07 percent
• Industry Sector Growth Q1 2026: 3.50 percent
• Industry Sector Growth Q1 2025: 3.42 percent
• Services Sector Growth Q1 2026: 4.31 percent
• Services Sector Contribution to GDP: 57.73 percent
• Oil Sector Growth Q1 2026: 2.57 percent
• Oil Sector Contribution to GDP: 3.92 percent
• Non-Oil Sector Growth Q1 2026: 3.94 percent
• Non-Oil Contribution to GDP: 96.08 percent
• Oil Sector Quarter-on-Quarter Growth: 9.31 percent

WHO WINS / WHO LOSES

Potential Winners:

• Services and non-oil sector operators
• Financial services and telecommunications industries
• Agricultural producers benefiting from output recovery
• Businesses linked to domestic consumption activity

Potential Losers:

• Oil-dependent revenue structures
• Sectors exposed to persistent inflationary pressure
• Manufacturers facing high operating and financing costs
• Households affected by weak real income growth

POLICY SIGNALS

The GDP figures reinforce growing economic diversification away from oil dependence toward services and non-oil activities.

The stronger agricultural performance also signals increasing policy emphasis on domestic production and food system resilience.

However, the slower quarterly expansion suggests that macroeconomic stabilisation efforts are still confronting structural growth limitations.

INVESTOR SIGNAL

For investors, the data supports the view that Nigeria’s strongest growth opportunities remain concentrated within services, telecommunications, finance and non-oil commercial sectors.

The rebound in agriculture may also strengthen medium-term interest in agro-processing and food supply-chain investments.

However, inflation, currency pressures and infrastructure constraints continue shaping overall investment risk assessment.

RISK RADAR

• Persistent inflationary pressures
• Weak household purchasing power
• High operating and energy costs
• Exchange-rate volatility
• Slower industrial expansion
• Infrastructure and logistics deficits
• Continued oil sector production volatility