The Centre for the Promotion of Private Enterprise (CPPE) has expressed cautious optimism over Nigeria’s economic performance in the first quarter of 2026, following the release of the latest Gross Domestic Product (GDP) figures by the National Bureau of Statistics (NBS).
According to the NBS report, Nigeria’s real GDP grew by 3.89 per cent year-on-year in Q1 2026, compared with 3.13 per cent recorded in the corresponding period of 2025.
In a policy brief signed by its Chief Executive Officer, Dr. Muda Yusuf, the CPPE said the growth figures reflected continued macroeconomic stabilisation, improving business confidence and the resilience of key non-oil sectors, despite a slight moderation from the 4.0 per cent growth recorded in Q4 2025.
The economic think tank noted that the moderation was not unusual, attributing it to seasonal and business cycle factors typically associated with first-quarter economic activities.
According to the CPPE, the services sector remained the principal driver of economic growth, contributing 57.73 per cent to GDP and expanding by 4.31 per cent during the quarter.
It highlighted strong performances in information and communications technology (ICT), financial services, trade, entertainment and construction, describing them as evidence of the increasing importance of the digital and services economy in Nigeria’s growth structure.
The ICT sector grew by 10.98 per cent, financial services expanded by 8.54 per cent, while the entertainment industry recorded 11.25 per cent growth.
The CPPE also identified the trade sector as the single largest contributor to GDP at 17.89 per cent, attributing the performance to improved exchange rate stability, better foreign exchange liquidity, easing inflationary pressures and recovering business confidence.
However, the organisation warned that sustainable economic transformation could not be driven by commerce alone, stressing the need for stronger productive capacity, deeper industrialisation and increased domestic value addition.
On manufacturing, the CPPE noted that the sector recorded a modest growth of 3.29 per cent, an improvement from the 1.13 per cent growth posted in Q4 2025.
The growth, it said, was largely driven by petroleum refining, food and beverages, cement, chemicals and pharmaceuticals.
Despite the improvement, the group lamented that manufacturing’s contribution to GDP remained below 10 per cent, citing high energy costs, elevated interest rates, weak infrastructure, logistics bottlenecks and policy uncertainties as major constraints affecting industrial productivity and competitiveness.
The policy brief also highlighted strong performances in construction, real estate, quarrying and minerals.
Particularly, the oil refining sector recorded an exceptional growth of 37.46 per cent, the strongest among all sectors during the quarter.
The CPPE described the performance as evidence of the transformative potential of domestic refining in strengthening energy security, promoting import substitution, accelerating industrialisation and conserving foreign exchange.
It stated that the strong performance was driven largely by the operations of the Dangote Petroleum Refinery, which it said was reshaping Nigeria’s energy ecosystem, strengthening domestic value addition and reducing dependence on imported petroleum products.
The organisation added that elevated regional and global demand for locally refined petroleum products, amid geopolitical tensions in the Middle East and disruptions in the global energy market, also supported the sector’s growth.
Similarly, quarrying and minerals grew by 23.41 per cent, while the cement sector expanded by 11.53 per cent, reflecting robust construction activities.
The CPPE further observed that although the non-oil sector accounted for 96.08 per cent of GDP, it contributed less than 15 per cent of foreign exchange earnings, exposing a major structural imbalance in the economy.
According to the group, the weak export competitiveness of the non-oil economy, low productivity and limited integration into global value chains remain major concerns.
The organisation, however, expressed serious concern over the performance of the electricity and gas sector, which contracted by 15.30 per cent during the quarter.
It described the development as the steepest contraction recorded by the sector in recent years and warned that it posed significant risks to industrial productivity, business competitiveness and sustainable economic growth.
The CPPE said the worsening electricity situation was escalating production costs for businesses already burdened by high interest rates, logistics challenges and weak consumer purchasing power.
It noted that the continued dependence on diesel and petrol-powered self-generation was eroding profitability across manufacturing, SMEs, hospitality, agro-processing and digital sectors.
The group called for urgent reforms across the electricity value chain, including increased investment in transmission infrastructure, improved market liquidity, accelerated metering, reduction of technical and commercial losses, and governance reforms capable of restoring investor confidence.
The aviation sector also came under pressure, recording a contraction of 7.62 per cent due to elevated aviation fuel prices, exchange rate pressures, multiple taxation, regulatory charges and high maintenance costs.
The CPPE warned that the contraction could have wider implications for trade, tourism, investment and business connectivity.
It also expressed concern over the persistent weakness of the textile industry, describing it as evidence of ongoing deindustrialisation and the erosion of domestic productive capacity.
According to the organisation, the decline of labour-intensive industries such as textiles has serious implications for employment generation, household incomes and poverty reduction.
The group further noted that the oil and gas sector slowed significantly from 6.79 per cent growth in Q4 2025 to 2.57 per cent in Q1 2026, despite ongoing reforms.
It said the moderation required urgent policy attention given the sector’s importance to fiscal revenues, foreign exchange earnings and macroeconomic stability.
While acknowledging that the GDP figures were encouraging from a macroeconomic perspective, the CPPE stressed that the quality and inclusiveness of growth remained critical.
It argued that economic growth must translate into improved living standards, stronger purchasing power and better welfare outcomes for citizens.
The organisation concluded that although Nigeria’s economy was being supported by resilient services, trade, construction and expanding domestic refining capacity, structural vulnerabilities in power supply, industrial productivity and export competitiveness remained major challenges.
It therefore urged policymakers to focus more deliberately on productivity enhancement, industrialisation, power sector reforms, export competitiveness and inclusive growth to achieve sustainable economic transformation and improved welfare outcomes for Nigerians.
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