September 2, 2026/CSL Report
- The Nigerian recorded its fastest quarterly growth in over 5 years, rising by 4.4% year-on-year (y/y) in Q2 2026.
- Performance was primarily driven by the non-oil sector, as growth rose by 4.3% y/y in Q2 2026, much higher than the 3.9% growth recorded in the prior quarter. Meanwhile oil sector growth printed at 7.3% y/y in Q2 2026.
- We expect economic growth to strengthen to around 4.5% in Q3 2026. However, downside risks to this outlook remain.
Data from the National Bureau of Statistics (NBS) showed that the Nigerian economy recorded its fastest quarterly growth in over five years, advancing by 4.4% y/y in Q2 2026, broadly in line with our expectations. We highlight that the outturn represents an acceleration from the 3.9% y/y growth recorded in Q1 2026 and exceeds the 4.2% y/y expansion achieved in the corresponding period last year.
On a sectoral basis, oil sector growth moderated as anticipated, slowing to 7.3% y/y in Q2 from 20.5% y/y in the same period last year, though it remained significantly stronger than the 2.6% recorded in Q1 2026. Meanwhile, the non-oil sector grew by 4.3% y/y in Q2 2026, outpacing the 3.9% y/y and 3.6% y/y growth recorded in Q1 2026 and Q2 2025 respectively.
We note that the services sector was the primary driver of non-oil performance, advancing by 4.6% y/y, up from 4.3% in Q1, accounting for 58.7% of overall expansion in Q2 2026. Agricultural sector growth also accelerated meaningfully, rising to 4.4% y/y from 3.2% y/y in Q1 and contributing 28.5% of overall Q2 expansion. Conversely, the manufacturing sector edged marginally lower, with growth easing to 3.2% y/y from 3.3% y/y in the preceding quarter.