September 1, 2026/InvestmentOne Report
Nigeria s economy carried the momentum from Q1 into Q2:2026, with real GDP growth rising to 4.43% YoY, from 3.89% in Q1:2026 and 4.23% in Q2:2025. Less like previous quarters the improvement was broad, as Services expanded by 4.60%, Agriculture by 4.39%, while Industries grew by 3.96%. In nominal terms, GDP increased to NGN119.29trn from NGN100.73trn in Q2:2025, representing 18.43% YoY growth, supported by stronger activity and higher prices across key sectors. More importantly, this performance came despite CBN keeping the MPR at 26.50%, meaning businesses were still operating in a relatively elevated interest rate environment. However, the broader macro environment offered some relief, as headline inflation eased to 15.91% in June, external reserves strengthened to about USD51.45bn, while the exchange rate closed the quarter around NGN1,379.80/USD. Overall, the Q2 numbers point to an economy gaining traction even without support from cheaper credit, as improving FX liquidity, softer inflation and stronger activity across key sectors helped sustain growth.
For 2026, we expect real GDP growth to come in at 4.25% (IMF: 4.10%, World Bank: 4.10%). Services should contribute notably, supported by telecommunications, trade and improving foreign exchange liquidity. In addition, the approaching harvest in September and October should provide an additional lift to agricultural output, helping to strengthen the sector s contribution to growth.
The external backdrop has strengthened, with external reserves reaching USD53.80bn in August 2026 a record high, surpassing 2009 s USD53.25bn. Consequently, the exchange rate appreciated by 7.16% to NGN1,332.96/USD by August 2026. However, we expect Q3 growth to be slightly softer than Q2. Oil production fell by 4.00% MoM to 1.67MMbpd in July after disruptions at the Erha and Akpo fields, while food inflation rose to 20.31%. A rebound in oil output toward 1.75-1.80MMbpd would support growth, but renewed disruption in the Strait of Hormuz, insecurity in major food-producing areas and persistent power shortages could weigh on activity.
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