Nigeria recorded a real GDP growth of 3.89% year-on-year in Q1 2026, showing continued macroeconomic stability and resilience in some non-oil sectors.

However, the Centre for the Promotion of Private Enterprise (CPPE) has warned that this growth figure hides deep structural problems that could affect long-term economic transformation.According to the CPPE policy brief, while the growth improved compared to 3.13% in Q1 2025, major constraints remain in electricity supply, industrial productivity, and export competitiveness.The report noted that the services sector remained the main driver of growth, contributing 57.73% to GDP, with ICT, financial services, entertainment, trade, and construction performing strongly.ICT grew by 10.98%, financial services by 8.54%, and entertainment by 11.25%, showing resilience in the digital and services economy.Trade also emerged as the largest contributor to GDP at 17.89%, supported by improved forex liquidity and relative exchange rate stability.Despite these positives, manufacturing growth remained modest at 3.29%, still below what is needed for strong industrial transformation, and its contribution to GDP stayed under 10%.CPPE highlighted high energy costs, weak infrastructure, logistics issues, and policy uncertainty as key constraints.A major concern raised was the electricity and gas sector, which contracted sharply by 15.30%, described as a red flag for productivity and industrial growth.Businesses continue to rely heavily on diesel and petrol generators, increasing production costs and reducing competitiveness.The non-oil sector accounted for 96.08% of GDP but contributes less than 15% of foreign exchange earnings, showing weak export capacity.

CPPE also praised growth in oil refining, especially driven by domestic refining capacity expansion, but stressed that Nigeria must focus more on industrialization, productivity, and export-driven growth to achieve sustainable economic development.