Nigeria’s economy strengthened further in Q2 2026 as real Gross Domestic Product (GDP) grew by 4.43% year-on-year (YoY), according to the National Bureau of Statistics (NBS). The performance was higher than the 4.23% recorded in Q2 2025 and represents an improvement from the 3.89% recorded in Q1 2026. This improvement was driven by stronger activity in non-oil sectors and supported a better performance from the oil sector. However, the growth remained uneven among sectors, as industrial-sector growth slowed significantly from 7.46% in Q2 2025 to 3.96% in Q2 2026.
Oil Sector
The Oil sector recorded a significant improvement in Q2 2026 as it grew by 7.31% year-on-year, compared with 2.57% in Q1 2026 and significantly lower than 20.46% in Q2 2025. On a quarter-on-quarter basis, the sector expanded by 10.91%. The stronger performance was supported by higher crude oil production as average daily production increased from 1.55mbpd in Q1 2026 to 1.72 million barrels per day (mbpd) in Q2 2026, which also exceeded the 1.68mbpd recorded in Q2 2025. The last time Nigeria had this production level was in Q1 2021 (1.72mbpd). NUPRC attributed the growth to stable production operations across most producing assets and the absence of any major pipeline outages during the period.
Non-Oil Sector
The non-oil sector remained the main engine of the Nigerian economy as it grew by 4.31% YoY in real terms in Q2 2026. This was higher than the 3.64% recorded in Q2 2025 and the 3.94% recorded in Q1 2026. The sector accounted for 95.84% of real GDP, although this was marginally lower than 95.95% in Q2 2025 and 96.08% in Q1 2026. The NBS identified agriculture (+4.39% YoY), information and communication(+9.62% YoY), real estate (+3.76% YoY), and trade (+2.40% YoY), as the major activities supporting non-oil growth.
However, the composition of non-oil growth remains important, as much of the momentum continues to come from services and agriculture, the industrial sector recorded slower growth.
Outlook
The Q2 GDP report provides evidence that the economy is gaining momentum on the back of higher oil production, improved agricultural activity and continued resilience in the services sector. The increase in crude oil production to 1.72mbpd is particularly encouraging, as sustained higher production could provide additional support to government revenue, foreign exchange liquidity and external reserves.
However, the industrial sector remains a major constraint. The slowdown in industrial growth from 7.46% to 3.96% suggests that structural supply-side challenges remain unresolved.
The outlook for the year 2026 will therefore depend on whether the improvement in oil production can be sustained and whether stronger activity begins to spread into manufacturing, construction, and other important sectors.
From an investment perspective, the current growth environment remains selectively positive. The strong performance of telecommunications, financial services, and agriculture provides support for companies exposed to these sectors.
Please follow the link “Q2 2026 GDP Report – Growth Broadens, but Industrial Growth Slowed” to view the whole report.
