By Seun Ibiyemi
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) report by the National Bureau of Statistics, which showed a year-on-year real GDP growth of 3.89 percent.
In a policy brief signed by CPPE Chief Executive Officer, Muda Yusuf, the organisation noted that the growth represents an improvement from the 3.13 percent recorded in the corresponding period of 2025, although slightly below the 4.0 percent growth achieved in the fourth quarter of 2025.
According to the report, the services sector remained the major driver of economic growth, contributing 57.73 percent to GDP and expanding by 4.31 percent. Key sectors such as ICT, financial services, trade, entertainment and construction recorded strong performances during the quarter.
The ICT sector grew by 10.98 percent, financial services expanded by 8.54 percent, while the entertainment industry recorded 11.25 percent growth, underscoring the increasing role of Nigeria’s digital economy in national output.
CPPE described the emergence of the trade sector as the single largest contributor to GDP at 17.89 percent as one of the major highlights of the report, attributing the development to improved exchange rate stability, better foreign exchange liquidity and easing inflationary pressures.
However, the organisation warned that sustainable economic transformation cannot rely on commerce alone, stressing the need for stronger productive capacity, deeper industrialisation and improved domestic value addition.
The manufacturing sector recorded a modest growth of 3.29 percent, up from 1.13 percent in the previous quarter, supported mainly by petroleum refining, food and beverages, cement, chemicals and pharmaceuticals.
Despite the improvement, CPPE noted that manufacturing contribution to GDP remains below 10 percent due to high energy costs, elevated interest rates, weak infrastructure and policy uncertainties.
The report also highlighted strong performances in the construction, real estate and refining sectors. Oil refining emerged as the fastest-growing sector with a 37.46 percent expansion, driven largely by operations at the Dangote Refinery.
CPPE said the refinery is reshaping Nigeria’s energy ecosystem, boosting domestic value addition and reducing dependence on imported petroleum products.
Quarrying and minerals grew by 23.41 percent, while the cement sector expanded by 11.53 percent, reflecting sustained construction activities across the economy.
Despite the positive outlook, CPPE identified the sharp contraction of the electricity and gas sector by 15.30 percent as the most troubling aspect of the report, warning that the decline poses serious risks to industrial productivity, business competitiveness and long-term economic sustainability.
The organisation stated that poor electricity supply continues to increase operating costs for businesses already burdened by high interest rates, logistics challenges and weak consumer purchasing power.
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CPPE also expressed concern over the contraction of the aviation sector by 7.62 percent, attributing the decline to rising aviation fuel prices, exchange rate pressures, multiple taxation and high maintenance costs. The textile industry was similarly described as remaining trapped in a prolonged recessionary cycle, reflecting broader deindustrialisation challenges.
The report further revealed that the oil and gas sector slowed significantly from 6.79 percent growth in the fourth quarter of 2025 to 2.57 percent in Q1 2026, raising concerns about fiscal revenues and foreign exchange earnings.
While describing the GDP figures as encouraging, CPPE stressed that the quality and inclusiveness of growth remain critical concerns, insisting that economic expansion must translate into improved living conditions, stronger purchasing power and better welfare outcomes for Nigerians.
