Services Push Q2 GDP Growth To 4.43% As Real Sector Slips

Nigeria’s economy grew by 4.43 per cent year-on-year in real terms in the second quarter of 2026, driven largely by the services sector, even as the real sector recorded a sharp decline in growth, the National Bureau of Statistics (NBS) has said.

The latest Gross Domestic Product (GDP) growth figure released by the NBS represents a modest improvement from the 4.23 per cent growth recorded in the corresponding quarter of 2025, indicating a strengthening in overall economic activity.

This is as analysts said the latest GDP performance showed Nigeria is on track to achieve the federal government’s 4.68 per cent Gross Domestic Product (GDP) growth target for 2026, following a 4.43 per cent

However, they cautioned that while the current growth trajectory was encouraging, Nigeria needed to sustain the ongoing economic reforms and achieve annual GDP growth of between eight and 10 per cent to adequately support its large and growing population.

According to the NBS, the services sector remained the strongest-performing of the three major sectors during the quarter, expanding by 4.60 per cent, up from 3.94 per cent recorded in the second quarter of 2025.

The agency said the sector’s continued expansion played a central role in lifting the overall growth figure for the quarter.

The industrial sector, however, told a different story. NBS data showed that industrial growth slowed sharply to 3.96 per cent in Q2 2026, nearly half the 7.46 per cent recorded in the same quarter of 2025.

“The growth of the industry sector stood at 3.96 per cent from 7.46 per cent recorded in the second quarter of 2025,” the statistics agency stated.

Agriculture, meanwhile, also posted stronger numbers, growing by 4.39 per cent, up from 2.82 per cent in the corresponding quarter of 2025.

“Agriculture grew by 4.39 per cent, an improvement from the 2.82 per cent recorded in the corresponding quarter of 2025,” the NBS said.

Analysts say the figures point to an economy in which growth is increasingly driven by services and agriculture, while the industrial base — covering manufacturing, mining, and utilities — continues to lose momentum.

The NBS, in its GDP report for the second quarter released on Monday, said real GDP grew by 4.43 per cent year-on-year in Q2 2026, compared with 4.23 per cent recorded in the corresponding quarter of 2025.

The latest growth represents a 0.20 percentage point increase over the 4.23 per cent recorded in Q2 2025 and was driven predominantly by the non-oil sector, which accounted for 95.84 per cent of real GDP during the quarter.

Head of Financial Institutions Ratings at Agusto & Co, Ayokunle Olubunmi, said the performance was broadly in line with analysts’ expectations and represented a positive development considering Nigeria’s recent growth trajectory.

“The GDP growth was not that different from what was widely expected by analysts, which I think is not bad given where we are coming from. The last administration was struggling to do two per cent, then we started doing three per cent,” Olubunmi said.

He said most analysts’ forecasts for the year had placed Nigeria’s economic growth at between 4 and 4.5 per cent, adding that the latest figure indicated the economy could sustain growth above 4 per cent for the full year as the impact of reforms implemented over the past two years becomes more evident.

According to him, increased economic activities associated with electioneering and the festive season could provide additional momentum for growth in the second half of the year.

“Election spending and election activities will also drive economic activities and support GDP growth in the near term,” he said.

On the possibility of exceeding the government’s 4.68 per cent growth target, Olubunmi said the target remained achievable.

“Economic activity is always very high in the last quarter because of festivities. The impact of electioneering spending will also drive up economic activities. So yes, it is possible to achieve 4.68 per cent,” he said.

The NBS figures showed that agriculture grew by 4.39 per cent in Q2 2026, up from 2.82 per cent in the corresponding quarter of 2025.

The services sector also recorded stronger growth, expanding by 4.60 per cent compared with 3.94 per cent in Q2 2025, while industry growth slowed to 3.96 per cent from 7.46 per cent recorded in the corresponding quarter of last year.

Services remained the largest contributor to Nigeria’s real GDP, accounting for 56.62 per cent of aggregate GDP in Q2 2026, compared with 56.53 per cent in Q2 2025.

In nominal terms, aggregate GDP stood at N119.27 trillion, representing an 18.43 per cent year-on-year increase from N100.7 trillion recorded in Q2 2025.

Real GDP stood at N53.47 trillion during the quarter.

The oil sector also recorded growth, although its performance moderated compared with the corresponding quarter of 2025.

The NBS said average daily oil production stood at 1.63 million barrels per day (mbpd) in Q2 2026, compared with 1.68mbpd in Q2 2025 and 1.55mbpd in Q1 2026.

Real growth in the oil sector stood at 7.31 per cent year-on-year, compared with 20.46 per cent recorded in Q2 2025. It was, however, higher than the 2.57 per cent growth recorded in Q1 2026.

On a quarter-on-quarter basis, the oil sector expanded by 10.91 per cent, while its contribution to total real GDP rose to 4.16 per cent from 4.05 per cent in Q2 2025 and 3.92 per cent in Q1 2026.

Also speaking on the performance, Professor of Law and developmental economist, Prof. Tayo Bello, described the Q2 growth as the fastest second-quarter expansion in five years.

“Based on the Q2 2026 GDP growth of 4.43 per cent, if we critically look at it in terms of economic growth and development, we can say this is the fastest Q2 expansion in the past five years. It demonstrates how resilient the economy is at the moment,” Bello said.

He attributed the performance largely to the growing dominance of the non-oil economy, saying the development showed that Nigeria was gradually reducing its dependence on crude oil.

“There are several factors responsible for this growth. Number one is the dominance of the non-oil sector, which is now the primary engine driving the real economy, accounting for about 96 per cent. Nigeria is gradually moving away from permanently concentrating on oil as a source of revenue,” he said.

Bello said agriculture and services were among the sectors that performed strongly, while arts, entertainment and recreation, as well as information and communication, also contributed significantly to the expansion.

Despite the positive growth figures, he cautioned that higher GDP growth did not automatically translate into improved living standards for Nigerians.

According to him, the high cost of goods and services remained a major challenge for households despite the expansion in economic activity.

“However, the question is what the ordinary Nigerian is getting from all these improvements. Despite the increase in economic growth, the current situation is still characterised by a high standard of living resulting from the high cost of goods and services,” he said.

“Ordinary citizens may not benefit immediately because of the inflationary trend. It is not that they will not benefit, but the benefits may take time to filter through if inflation and the high cost of living can be sustained at lower levels.”

Chief Executive of CFG Advisory, Tilewa Adebajo, said Nigeria still required substantially higher growth to support its population and achieve optimal economic development.

“Nigerian economy requires annual eight to 10 per cent GDP growth to support 250 million households. On the positive side, we have broken the stagflation stranglehold, as government struggles to consolidate on the reform gains for higher productivity and optimal growth,” Adebajo said.

He, however, warned that fiscal weaknesses and the rising cost of servicing the country’s debt continued to constrain economic expansion.

“A very weak fiscal regime and high cost of sustaining a rising debt profile continues to stunt growth in a high interest rate regime,” he said.

Meanwhile, Bello warned that the economic gains recorded under the ongoing reform programme must be protected from political interference, particularly as political activities intensify.

“The economic indices show that we are moving forward for now, and it should not be politicised to the extent that it will drag whatever nominal or marginal gains into the vote,” he said.

He also called for reduced political tension, warning that instability could undermine infrastructure and other economic gains recorded in recent years.

“I hope that the political turmoil and tension should be reduced and have normalcy in the area of politics, so that you don’t have a situation that the infrastructures that we have on ground will be destroyed by political thuggery,” Bello said.

He said the resilience demonstrated by the economy provided an opportunity for Nigeria to build on the gains recorded so far.

“Above all, we are moving gradually, and the resilience. And the important thing is, once the economy has been able to adjust itself in a resilient way, then that country can stay itself and move to greater height if it is not, how would I put it, sandwiched or blocked by certain people,” he said.