Nigeria’s economy strengthened further in Q1 2026, with real GDP growing by 3.89% year-on-year, according to the National Bureau of Statistics (NBS). Although this performance exceeded the 3.13% growth recorded in Q1 2025, it remained slightly below the 4.07% achieved in Q4 2025. The oil refining subsector stood out as the best performer, which recorded a significant 37.46% year-on-year growth. This huge growth is due to the spike in oil prices because of the US/Iran conflict that broke out in late February.

Oil Sector

The Oil sector posted a moderated growth of 2.57%, which is higher than the 1.57% increase in Q1 2025 but lower than that of Q4 2025 (6.79%). This drop quarter-on quarter is due to a continuous drop in the oil production, which dropped from 1.58mpd in Q4 2025 to 1.55mpd in Q1 2026. The Oil sector contribution to GDP stood at 3.92%. (Q1 2025: 2.87%, Q4 2025: 3.97%).

Non-Oil Sector

The non-oil sector remained the primary driver of economic activity, expanding by 3.94% year-on-year. This marks an improvement from the 3.19% growth recorded in Q1 2025, although it was slightly lower than the 3.99% achieved in Q4 2025. Accounting for 96.08% of total GDP, the non-oil sector continued to benefit from a relatively stable macroeconomic environment, supported by moderating inflation and improving investor sentiment, which enhanced overall economic activities.

Outlook

Looking ahead, the ongoing US-Iran conflict is expected to provide support for the oil sector due to the surge in global crude oil prices triggered by the closure of the Strait of Hormuz. However, Nigeria’s daily crude oil production remains a major constraint, as output continues to trend downward. A sustained increase in oil production over the coming months could serve as a key driver of growth within the sector.

On the non-oil side, rising inflationary pressures may weaken the growth momentum of the sector if the Strait of Hormuz remains closed for an extended period. Nevertheless, with other macroeconomic indicators remaining relatively stable, we expect the non-oil sector to continue acting as a major catalyst for overall GDP growth.

Please follow the link “Q1 2026 GDP Report – Stable Growth Amidst Global Tensions” to view the whole report.