Nigeria’s Economic Growth Hits Five-Year High on War-Induced Oil Rally

Nigeria’s economy grew at its fastest pace in five years in the second quarter of 2026, helped by a sharp rebound in oil production as the Iran war pushed crude prices higher and tightened global supply.

Gross Domestic Product expanded 4.43 percent year-on-year in real terms in the second quarter, up from 3.89 percent in the first quarter, according to data released by the National Bureau of Statistics on Monday.

The growth was the strongest since the second quarter of 2021, with both the oil and non-oil sectors recording faster expansion than in the preceding quarter.
The oil sector was the main driver of the acceleration, growing 7.31 percent in Q2, compared with 2.57 percent in Q1.

Higher crude prices following the escalation of the US-Iran conflict, alongside increased domestic production, supported the sector’s stronger performance.

Nigeria’s average daily crude oil production rose to 1.72 million barrels per day in the second quarter, from 1.68 million bpd in the same period of 2025 and 1.55 million bpd in the first quarter of 2026.

The stronger oil performance is particularly significant for Nigeria, Africa’s largest oil producer, where crude exports remain a major source of foreign exchange earnings and government revenue.

The non-oil sector also gained momentum, expanding 4.31 percent in Q2 from 3.94 percent in the previous quarter.
The services sector provided the biggest boost, growing 4.60 percent, with telecommunications expanding 10.38 percent, financial institutions 8.40 percent, real estate 3.80 percent and trade 2.40 percent.

Agriculture grew 4.39 percent, supported by stronger crop production, which increased 3.66 percent.
Industry expanded 3.96 percent, driven in part by stronger cement manufacturing, which grew 12.75 percent, as well as construction.

The economy has been gaining momentum since growth slowed in the aftermath of the country’s cost-of-living crisis and the removal of the petrol subsidy in 2023.

It expanded 3.87 percent in real terms in 2025, up from 3.38 percent in 2024.

However, growth remains below the seven percent annual rate targeted by President Bola Tinubu’s administration by 2027, highlighting the challenge of translating the recent recovery into stronger and more sustained economic expansion.

The latest GDP figures also come ahead of the 2027 presidential election, when economic performance is expected to be a key issue for voters.

Tinubu is expected to seek re-election for a second and final four-year term in the election scheduled for early 2027, with the performance of his administration on the economy, inflation, jobs and security likely to come under scrutiny.
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