September 1, 2026/Cordros Report
According to the National Bureau of Statistics (NBS), Nigeria’s real GDP grew by 4.43% y/y in Q2-26 (vs Q1-26: +3.89% y/y), marking its fastest growth since Q2-21. The stronger print was driven by a rebound in the oil sector (+7.31% y/y vs Q1-26: +2.57% y/y) reflecting higher crude oil production, alongside an acceleration in non-oil sector growth (+4.31% y/y vs Q1-26: +3.94% y/y). Within the non-oil economy, growth accelerated in agriculture (+4.39% y/y vs Q1-26: +3.15% y/y) and services (+4.60% y/y vs Q1-26: +4.31% y/y), while manufacturing growth (+3.24% y/y vs Q1-26: +3.29% y/y) moderated slightly. In terms of output composition, the non-oil sector accounted for 95.84% of real GDP in Q2-26 (Q1-26: 96.08%), bringing the oil sector’s share to 4.16% (Q1-26: 3.92%).
Oil Sector Growth Improves on Higher Crude Oil Production
The oil sector expanded by 7.31% y/y in Q2-26, a significant improvement from 2.57% recorded in Q1-26, though still lower than +20.46% y/y recorded in Q2-25. The rebound largely reflected higher oil production, which according to the NBS averaged 1.72mb/d in Q2-26 (Q1-26: 1.55mb/d | Q2-25: 1.68mb/d). We attribute the stronger performance to more stable operations across key producing assets and the absence of major pipeline outages, which boosted production uptime and crude evacuation efficiency. More specifically, oil production increased at the Brass (+44.9% y/y), Bonny (+27.9% y/y) and Qua Iboe (+6.0% y/y) terminals while output declined at Tulja (-21.5% y/y), Odudu (-6.3% y/y) and Escravos (-4.4% y/y).
Non-Oil Sector Growth Strengthens
Despite the challenging operating environment, the non-oil sector expanded by 4.31% y/y in Q2-26, up from 3.94% y/y in Q1-26 and 3.64% y/y in Q2-25. The expansion was supported by improved FX availability, naira appreciation, alongside stronger festive spending and capital expenditure. The improvement reflected growth in the agriculture and services sectors while the manufacturing sector moderated. The non-oil sector accounted for 95.84% of real GDP in Q2-26, marginally below 96.08% recorded in Q1-26.
Services: Growth in the services sector accelerated to 4.60% y/y in Q2-26 from 4.31% y/y in Q1-26 (Q1-25: +3.94% y/y), led by the accommodation & food services (+6.96% y/y vs Q1-26: +4.36% y/y), financial and insurance (+9.29% y/y vs Q1-26: +8.54% y/y), education (+2.76% y/y vs Q1-26: +1.22% y/y) and real estate (+3.76% y/y vs Q1-26: +2.29% y/y). Meanwhile, the transportation & storage (+5.70% y/y vs Q1-26: +7.41% y/y) and information & communication (+9.62% vs Q1-26: +10.98% y/y) grew at a slower pace.
Accommodation and food services (+6.96% y/y vs Q1-26: +4.36%) accelerated, likely supported by stronger travel and hospitality during the Easter and Eid al-Adha festivities. Taken alongside the PMI data, this suggests that the acceleration was driven more by seasonal and event related activity than by a broad based recovery in consumer spending.
Growth in financial and insurance services rose to +9.29% y/y in Q2-26 (Q1-26: +8.54% y/y), reflecting stronger growth in insurance services (+16.13% y/y vs Q1-26: Q1-26: +9.94% y/y) which offset the moderation in financial services (+8.35% y/y vs Q1-26: +8.40% y/y). The stronger insurance performance likely reflected higher premium generation and underwriting activity, supported by firms’ efforts to strengthen their capital positions and increased enforcement of compulsory insurance requirements. Meanwhile, growth in financial institutions moderated as relatively tight financial conditions constrained risk-asset creation and credit expansion.
Similarly, real estate activity improved, with growth accelerating to 3.76% y/y in Q2-26, from +2.29% y/y in Q1-26, primarily driven by stronger demand for commercial and residential properties.
By contrast, transport sector growth moderated to 5.70% y/y in Q2-26 (Q1-26: 7.41% y/y). The moderation reflected slower growth in road (+5.82% y/y vs Q1-26: +9.64% y/y) and rail (+3.74% y/y vs Q1-26: +6.03% y/y) which more than offset stronger activity in water (+6.32% y/y vs Q1-26: +4.20% y/y) and air (+3.85% y/y vs Q1-26: -7.62% y/y). The latter benefited from increased travel during the festive period. We attribute the slowdown in road transport to elevated fuel costs amid persistent insecurity and banditry along key transport corridors.
Meanwhile, growth in the ICT sub-sector moderated to 9.62% y/y (Q1-26: +10.98% y/y), driven by slower growth in telecommunication (+10.38% y/y vs Q1-26: +12.24%) despite robust demand for voice and data services. For context, broadband penetration rose to 56.79% in Q2-26 (Q2-25: 48.78%) and subscriber base strengthened to 192.23 million subscribers from 171.72 million subscribers recorded in Q2-25. That said, we attribute the slowdown partly to higher operating costs amid elevated energy prices, given the energy intensive nature of telecommunication infrastructure.
Agriculture: Agricultural output expanded by 4.39% y/y in Q2-26, up from 3.15% y/y in Q1-26, reflecting broad based improvements across all four subsectors. Specifically, crop production grew by 3.66% y/y (Q1-26: +3.39% y/y), reflecting the favourable impact of the off-season harvest. Livestock growth also improved (+6.92% y/y vs Q1-26: +2.20% y/y) primarily driven by stronger festive demand around Easter and Eid al-Adha celebrations. Similarly, forestry (4.88% vs Q1-26: 4.14% y/y) and fishing (+2.16% y/y vs Q1-26: +1.72% y/y) subsectors expanded.
Manufacturing: Manufacturing sector was the only sector to record a moderation, with growth slowing to 3.24% y/y in Q2-26, down from 3.29% y/y in Q1-26. The moderation reflected weaker activity across food, beverage & tobacco (+2.79% y/y vs Q1-26: +4.10% y/y), motor vehicles (-1.02% y/y vs Q1-26: +5.44% y/y) and textiles (-1.23 vs Q1-26: -1.22% y/y) subsectors. These declines more than offset continued strong growth in oil refining (+43.94% vs Q1-26: +37.46% y/y) and cement (+12.75% y/y vs Q1-26: +11.53% y/y) subsectors. In addition, the decline in food activity reflects continued pressure on household purchasing power as inflation increased to 15.93% y/y in June from 15.38% y/y in March, alongside elevated production costs.
On the other hand, oil refining remained strong supported by the continued ramp-up in domestic refining capacity. Also, cement activities improved, on the back of higher real estate (+3.76% y/y vs Q1-26: +2.29% y/y) and construction (+6.75% y/y vs Q1-26: +6.38% y/y) activities likely supported by sustained public infrastructure spending and ongoing road and bridge projects.
Q3-26 GDP Outlook – Growth to Remain Resilient Despite Growing Challenges
Oil GDP: Crude oil production is expected to remain broadly stable at an average of 1.68mb/d in Q3-26, supported by improved pipeline security, continued private surveillance efforts to curb oil theft and vandalism, and recent upstream investments. Nonetheless, persistent operational challenges and scheduled maintenance may limit further output gains. However, combined crude oil and condensate production declined by 4.0% m/m to 1.67mb/d in July (June: 1.74mb/d), partly reflecting operational disruptions at the Erha and Akpo offshore fields. Given the ongoing force majeure at Erha, which has constrained about 34,000b/d of export capacity, alongside drilling delays and fluid-handling challenges at Akpo West, we expect production to remain close to current levels through the rest of Q3-26. Accordingly, we project oil GDP growth at 8.36% y/y in Q3-26 (Q2-26: +7.31% y/y).
Non-Oil GDP: Meanwhile, we anticipate stronger growth in the non-oil sector (+4.41% y/y vs Q2-26: +4.31% y/y), driven by sustained expansion in services and more moderate but resilient activity in agriculture and manufacturing. Broadly, easing inflationary pressures and improved business confidence should support household spending, while sustained FX liquidity should ease access to imported inputs and strengthen private sector activity.
Services: We project services sector growth to improve slightly to 4.64% y/y in Q3-26 (Q2-26: +4.60% y/y), supported by improved activity in trade, telecommunications and transportation. Trade activity is expected to benefit from the moderation in inflationary pressures relative to Q2-26 and sustained FX liquidity, which has improved access to imported goods. Meanwhile, reduced volatility in fuel price and improved product availability are likely to support a gradual recovery in transportation and logistics activity. Nonetheless, still elevated fuel prices may limit the pace of growth.
Telecommunications growth is expected to remain strong, supported by the carryover from ongoing network upgrades. By May, operators had completed more than 5,000 of over 12,000 planned coverage and capacity sites and extended fibre connectivity to over 700 sites. These investments should help meet rising data demand, with data consumption increasing by 46.8% y/y to 1.53 million terabytes in June.
Conversely, tight monetary conditions and elevated borrowing costs may constrain private sector credit demand and property transactions, limiting growth in finance and real estate. Nevertheless, stronger capital positions following the completion of the insurance sector recapitalisation exercise, increased enforcement of compulsory insurance requirements and improved underwriting capacity are expected to sustain robust insurance growth.
Agriculture: We forecast growth to improve further in the agricultural sector to 4.61% y/y, from 4.39% y/y recorded in Q2-26. Growth is expected to be supported by early harvests and favourable rainfall conditions across several producing areas, alongside the timely distribution of fertiliser and improved seeds for the 2026 wet season. Firm activity in agricultural support services, livestock, forestry and fishing is also expected to support the sector. Indeed, the agriculture PMI remained expansionary at 52.1 points in July, marking the twenty-fourth consecutive month of growth. Nonetheless, localised flooding, persistent insecurity and signs of weakness in crop production may constrain the pace of expansion.
Manufacturing: Growth in the manufacturing (+3.03% y/y vs Q2-26: +3.24% y/y) sector may moderate slightly in Q3-26, primarily reflecting slower expansion in cement production, as heavier rainfall typically weighs on construction activity and can disrupt the transportation of raw materials and finished products. Nonetheless, improved capital spending across states may sustain relatively stronger growth compared to the previous year. Other key subsectors—including food, beverages and tobacco; textiles, apparel and footwear; and chemicals and pharmaceuticals—are expected to benefit from sustained FX liquidity and exchange rate stability, which are easing access to imported raw materials and limiting cost pressures linked to the exchange rate. The continued ramp up in domestic refinery output, alongside firm domestic and export demand for refined petroleum products, is expected to sustain strong growth in oil refining.
Broadly, based on our oil (+8.36% y/y) and non-oil (+4.41% y/y) sector forecasts, we project real GDP growth of 4.55% y/y in Q3-26 and 4.40% y/y for 2026FY.