Nigeria's economic momentum cooled modestly in the opening quarter of 2026, with gross domestic product rising 3.89% year-on-year, down from the 4.07% growth rate posted in the final quarter of 2025, according to official figures released on Monday.
The National Bureau of Statistics reported that the deceleration was evident across both the oil and the non-oil segments of the economy when compared with the fourth quarter of 2025. The data indicate a broadly synchronous slowdown rather than a contraction confined to a single sector.
Policy changes enacted since the president took office in 2023 remain central to the government's strategy for restoring fiscal stability and spurring higher growth. Those measures include removing costly fuel and power subsidies, implementing a devaluation of the naira currency and overhauling the tax system. The stated intent of these reforms is to strengthen public finances and support a pickup in economic activity.
On an annual basis, the economy registered a small improvement in momentum in 2025 relative to 2024, with real growth of 3.87% in 2025 compared with 3.38% in 2024. Despite that upward movement, the pace of expansion is still well below the 7% annual growth rate the president has set as a goal for 2027.
The president is preparing to seek a second and final four-year term, with an election scheduled for January next year. The economy's performance will be a central part of the policy and political narrative in the run-up to that vote.
Production figures for the oil sector, also published by the statistics agency, showed that Nigeria's average daily oil output was 1.55 million barrels per day in the first three months of 2026. That compares with average daily production of 1.58 million barrels per day in the fourth quarter of 2025.
Summary
Nigeria's economy grew 3.89% year-on-year in Q1 2026, a slight slowdown from Q4 2025. Growth eased across both oil and non-oil sectors. Policy reforms since 2023 aim to stabilize public finances and lift growth, but expansion remains below the 7% target for 2027. Average daily oil production dipped to 1.55 million barrels per day in the first quarter.
Key points
- GDP growth in Q1 2026 was 3.89% year-on-year, down from 4.07% in Q4 2025 - impacts markets tied to macroeconomic momentum and sovereign fiscal outlook.
- Both oil and non-oil sectors showed slower growth versus the prior quarter - relevant for energy, manufacturing and services sectors.
- Average daily oil production fell to 1.55 million barrels per day in Q1 2026 from 1.58 million in Q4 2025 - a data point for oil-sector revenues and external receipts.
Risks and uncertainties
- The economy remains below the 7% annual growth target set for 2027, presenting a risk to fiscal and development plans if higher growth is not achieved - affects public finances and investment expectations.
- The effectiveness of policy measures enacted since 2023 - including subsidy removals, currency devaluation and tax reform - in delivering sustained acceleration is not yet reflected in reaching the 2027 growth goal.
- Slower oil production relative to the prior quarter could weigh on oil-sector receipts and related government revenue streams.
These figures and policy developments will be closely watched as the country approaches the presidential election in January next year.