- Nigeria’s Economic Growth Slows to 3.89% in First Quarter as Oil, Non-Oil Sectors Ease
Nigeria’s economy expanded at a slower pace in the first quarter of 2026, underscoring the difficulty of accelerating growth in Africa’s most populous nation despite sweeping reforms aimed at strengthening public finances and attracting investment.
Official data released on Monday showed that gross domestic product grew by 3.89 per cent year-on-year in the first quarter, down from 4.07 per cent in the final quarter of 2025.
The National Bureau of Statistics said growth slowed in both the oil and non-oil sectors compared with the fourth quarter of last year, suggesting that Nigeria’s recovery remains uneven even as broader macroeconomic reforms begin to take hold.
Since taking office in 2023, President Bola Tinubu has scrapped costly fuel and power subsidies, devalued the naira and overhauled the tax system in an attempt to repair public finances and reposition the economy for stronger growth.
Those reforms have begun to shift parts of the economy toward recovery, but they have also imposed heavy costs on households and businesses through higher fuel prices, currency weakness, inflationary pressure and elevated operating expenses.
Nigeria’s economy grew 3.87 per cent in real terms in 2025, up from 3.38 per cent in 2024, showing gradual improvement. But the pace of expansion remains well below Tinubu’s stated target of 7 per cent annual growth by 2027.
The first-quarter slowdown therefore presents a policy challenge for Abuja. While growth remains positive, it is not yet strong enough to deliver the scale of job creation, income recovery and investment momentum needed to ease social pressure in a country facing high living costs and persistent infrastructure constraints.
Oil production also softened during the quarter. Average daily crude output stood at 1.55 million barrels per day in the first three months of 2026, compared with 1.58 million barrels per day in the fourth quarter of 2025, according to data from the statistics agency.
The oil sector remains central to Nigeria’s fiscal and external position, providing a key source of government revenue and foreign exchange. Any weakness in output therefore carries broader implications for the naira, reserves, public finances and investor confidence.
At the same time, the moderation in non-oil growth suggests that reforms have yet to produce a broad-based expansion across manufacturing, trade, services and agriculture at the speed required to transform Nigeria’s economic trajectory.
The political context also matters. Tinubu is expected to seek a second and final four-year term in an election scheduled for January next year, making economic performance a central issue for voters, investors and policymakers.
For investors, the data sends a mixed signal. Nigeria’s economy is still expanding and reform momentum remains visible. But growth is not yet accelerating decisively, and the gap between current performance and the government’s 7 per cent target remains wide.
The next phase of Nigeria’s recovery will depend on whether reforms can translate into stronger private investment, improved oil output, more stable foreign exchange conditions and deeper non-oil sector productivity.
For now, the first-quarter numbers show an economy moving forward, but not fast enough to match the ambitions of Africa’s largest consumer market.
