By Boluwatife Oshadiya | May 28, 2026
Key Points
- Nigeria’s economy expanded by 3.89% year-on-year in Q1 2026, up from 3.13% in Q1 2025
- Oil refining emerged as the fastest-growing sector with 37.46% growth
- Telecommunications, quarrying, cement and entertainment recorded strong expansions during the quarter
Main Story
Nigeria’s economy recorded stronger growth momentum in the first quarter of 2026, driven by significant expansion across oil refining, telecommunications, quarrying, entertainment, insurance and industrial production sectors.
Latest GDP figures showed that the economy grew by 3.89% year-on-year in real terms during Q1 2026, improving from the 3.13% recorded in the corresponding period of 2025.
Oil refining emerged as the fastest-growing sector, posting 37.46% growth compared to 11.51% in Q1 2025. The sharp expansion was largely driven by increased domestic refining activity and the continued ramp-up of operations at the Dangote Refinery.
Quarrying and other minerals ranked second with 23.41% growth, reversing the contraction recorded in the same period last year. Telecommunications and information services followed with 12.24% growth, supported by rising internet penetration, fintech expansion and increasing data consumption.
The cement sector also recorded strong growth of 11.53% as construction and infrastructure activity improved despite elevated building costs. Arts, entertainment and recreation expanded by 11.25%, while information and communication services grew by 10.98%.
Road transport, insurance, water supply and waste management, as well as motion picture and music production, also ranked among the country’s fastest-growing sectors during the quarter.
Additional sectors that posted positive growth included financial and insurance services at 8.54%, construction at 6.38%, rail transport and pipelines at 6.03%, and chemical and pharmaceutical products at 6.15%.
“The strong rebound in refining activity is beginning to reshape Nigeria’s industrial landscape and reduce dependence on imported petroleum products,” analysts at Financial Derivatives Company noted in a market commentary.
The Issues
The Q1 2026 growth pattern reflects a broader shift within Nigeria’s economy toward services, digital infrastructure and domestic industrial production. While oil refining and quarrying recorded impressive recoveries, economists note that overall GDP growth remains below the level required to significantly reduce unemployment and poverty.
Infrastructure gaps, inflationary pressures, foreign exchange volatility and weak purchasing power continue to weigh on broader economic productivity despite improvements in several sectors.
The rapid growth in telecommunications, entertainment and digital services also highlights the increasing role of technology-driven sectors in Nigeria’s economic transformation, particularly among younger consumers and businesses.
What’s Being Said
“The expansion in telecommunications and digital services confirms that Nigeria’s digital economy remains one of the country’s strongest long-term growth drivers,” said Bismarck Rewane, Managing Director of Financial Derivatives Company.
Industry analysts also pointed to the significance of rising domestic refining activity.
“Higher local refining capacity could improve energy security, reduce import dependence and strengthen industrial value chains over the medium term,” said energy economist Kelvin Emmanuel.
Meanwhile, manufacturers have continued to emphasise the need for lower borrowing costs, stable electricity supply and improved logistics infrastructure to sustain industrial growth.
What’s Next
- Economists will monitor whether Nigeria can sustain GDP growth above 4% over subsequent quarters in 2026
- The continued expansion of Dangote Refinery operations is expected to further influence refining output and petroleum supply dynamics
- Policymakers are likely to focus on infrastructure investment, digital economy expansion and industrial productivity as key growth drivers
The Bottom Line: Nigeria’s Q1 2026 growth data suggests that the economy is gradually broadening beyond traditional oil production into refining, digital services and industrial activity. Sustaining that momentum, however, will depend heavily on infrastructure improvements, policy stability and stronger consumer purchasing power.
