The latest GDP report released by the Nigerian Bureau of Statistics (NBS) indicates that Nigeria’s economy expanded by 4.07% y/y in Q4-25, up from 3.98% y/y in Q3-25. The stronger outturn was underpinned by sustained growth across both the oil (+6.79% y/y vs Q3-25: +5.84% y/y) and non-oil (+3.99% y/y vs Q3-25: +3.91% y/y) sectors. Growth in the oil sector was largely driven by higher crude oil production compared to the corresponding period of the previous year.
Meanwhile, the non-oil sector benefitted from improved performance in agriculture (+4.00% y/y vs Q3-25: +3.79% y/y) and stable expansion in services (+4.15% y/y vs Q3-25: +4.15% y/y), despite a moderation in manufacturing growth (+1.13% y/y vs Q3-25: +1.25% y/y). In terms of output composition, the non-oil sector’s contribution to GDP rose to 97.13% (Q3-25: 96.56%), while the oil sector’s share declined to 2.87% (Q3-25: 3.44%). On a full year basis, Nigeria’s GDP grew by 3.87% y/y in 2025FY (2024FY: +3.34% y/y).
Oil Sector Remains in Expansion
GDP growth in the oil sector increased to 6.79% y/y in Q4-25 (Q3-24: +5.84% y/y). Oil sector growth was supported by higher crude oil production, with output rising by 2.6% y/y to an average of 1.58 mb/d in Q4-25, compared with 1.54 mb/d in Q4-24, according to the NBS. We attribute the improvement in crude oil production to enhanced pipeline surveillance and strengthened security interventions across key producing regions, alongside increased upstream capital expenditure and renewed investment momentum in onshore oil assets by indigenous operators. Despite improvement, persistent infrastructure constraints, intermittent operational disruptions, and residual crude theft have continued to cap production below its potential. For 2025FY, the oil sector expanded by 8.50% y/y (2024FY: +5.54% y/y).
Non-oil Sector Sustains Momentum Amid Seasonal Tailwinds
The non-oil sector maintained its expansionary trajectory, with growth edging higher to 3.99% y/y in Q4-25 from 3.91% y/y in Q3-25, culminating in a full year expansion of 3.71% y/y in 2025FY (2024FY: 3.31% y/y). The improved performance in Q4-25 reflects a relatively more supportive macroeconomic environment, complemented by seasonal tailwinds, notably the main harvest cycle and stronger consumer spending associated with yearend festivities. At the sectoral level, agriculture (+4.00% y/y vs Q3-25: +3.79% y/y) recorded stronger growth compared to the preceding quarter. The services sector (+4.10% y/y vs Q3-25: +4.10% y/y) maintained its steady pace of expansion, continuing to anchor overall non-oil performance. In contrast, manufacturing growth moderated to +1.13% y/y (Q3-25: +1.25% y/y), reflecting softer momentum during the period.
Services: Within the services sector, performance was mixed but broadly supportive of overall growth. Expansion strengthened in ICT (+7.55% y/y vs Q3-25: +5.78% y/y), transportation and storage (+21.25% y/y vs Q3-25: +9.87% y/y), and trade (+2.00% y/y vs Q3-25: +1.98% y/y), signalling improved momentum across consumer and mobility linked segments. Conversely, growth moderated in real estate (+3.43% y/y vs Q3-25: +3.50% y/y) and finance and insurance (+8.30% y/y vs Q3-25: +19.63% y/y), indicating lingering structural and financial constraints in asset driven activities.
The acceleration in ICT was largely driven by stronger telecommunications performance (+8.39% y/y vs Q3-25: +6.14% y/y), supported by rising broadband penetration (December 2025: 51.97% vs December 2024: 44.43%) and sustained demand for voice and data services amid ongoing digital adoption. Seasonal effects also likely amplified activity, as the year-end period typically records elevated data usage from increased social media engagement, live streaming, higher consumption of digital entertainment content and e-commerce.
Similarly, the sharp expansion in transportation and storage reflects heightened mobility during the festive season, which tends to boost interstate travel, passenger traffic, and demand for logistics and haulage services. Increased commercial transactions and e-commerce deliveries ahead of the holidays likely provided additional support to freight volumes. Continued supply of refined petroleum products and weaker price increases also underpinned a resilient growth in the sector.
The improvement in trade activity also appears consistent with stronger festive driven consumer spending, promotional retail campaigns, and faster inventory turnover during the year end sales cycle.
In contrast, real estate activity remained subdued, reflecting weak demand for property services amid elevated borrowing costs, constrained household purchasing power, and persistently high construction input prices. Meanwhile, the moderation in financial and insurance growth likely stemmed from softer risk asset creation, as tight liquidity conditions and elevated interest rates continued to weigh on credit expansion.
Agriculture: Growth in the agricultural sector strengthened in Q4-25, primarily supported by the onset of the main harvest season, which boosted crop output and improved overall supply conditions. The expansion was further reinforced by heightened food demand during the festive period, contributing to broad based gains across key segments. Crop production maintained a modest uptick at +3.94% y/y (Q3-25: +3.90% y/y), alongside stronger expansions in livestock (+4.07% y/y vs Q3-25: +3.49% y/y) and fishing (+2.15% y/y vs Q3-25: +1.58% y/y). Forestry (+6.52% y/y vs Q3-25: +4.69% y/y) also posted stronger growth, underpinned by increased timber extraction and firmer demand for wood products, partly linked to construction activity and seasonal commercial operations.
Manufacturing: The relatively subdued performance of the manufacturing sector primarily reflects softer momentum in the cement subsector (+4.12% y/y vs Q3-25: +4.68% y/y), alongside a continued contraction in textile, apparel and footwear (-2.68% y/y vs Q3-25: -2.41% y/y). The moderation in cement output appears closely aligned with weaker construction (+5.08% y/y vs Q3-25: +5.57% y/y) activity, likely constrained by subdued public capital expenditure and extended rainfall in Q4-25, which disrupted project timelines and execution. Meanwhile, the persistent downturn in textile, apparel and footwear underscores entrenched structural challenges, including elevated input costs, fragile consumer purchasing power, intensified competition from lower-cost imports, and recurring power supply constraints. In contrast, the food, beverage and tobacco subsector (+2.25% y/y vs Q3-25: +1.97% y/y) recorded stronger growth, reflecting increased seasonal demand associated with year end festivities. Growth in the oil refining (+12.10% y/y vs Q3-25: +19.42 y/y) subsector slowed but remained robust, driven by sustained domestic production of refined petroleum products.
Q1-26 GDP Outlook – Activity Normalisation Likely to Temper Expansion
Oil GDP: Crude oil production is poised for a meaningful recovery in Q1-26, underpinned by operational normalisation and structurally improved evacuation efficiency. Specifically, we expect the rebound to be primarily driven by the post-maintenance restoration of output across several upstream assets.
Concurrently, intensified pipeline surveillance and enhanced security coordination across key transport corridors are improving evacuation reliability and curbing crude losses, thereby supporting higher effective output. In addition, the recently commissioned Floating Storage and Offloading vessel (FSO Cawthorne) materially strengthens offshore evacuation flexibility by expanding storage capacity, alleviating export bottlenecks, and reducing reliance on vulnerable onshore infrastructure. Consistent with this improving backdrop, data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that crude oil production (including condensates) rose by 5.8% to 1.63 mb/d in January (December: 1.54 mb/d), with the FSO Cawthorne contributing approximately 0.38 mb/d to total output. We expect production to increase further over the remainder of the quarter, supported by these operational and structural tailwinds.
Overall, we project crude oil production to average 1.66 mb/d in Q1-26, representing a 5.1% q/q increase from 1.58 mb/d in Q4-25. However, given the elevated base in Q1-25 (1.62 mb/d), year-on-year growth in the oil sector is likely to moderate. Accordingly, we forecast oil sector expansion of 4.94% y/y in Q1-26.
Non-Oil GDP: We anticipate a moderation in non-oil sector growth in Q1-26, largely reflecting early year demand normalisation following the seasonal uplift recorded in Q4-25. Nonetheless, an improving macroeconomic environment — characterised by further easing in inflationary pressures and sustained naira appreciation — is expected to bolster business sentiment, improve purchasing power, and maintain growth momentum relative to the corresponding period of the prior year. Overall, we project non-oil sector growth to moderate to 3.60% y/y in Q1-26 (Q4-25: +3.99% y/y | Q1-25: +3.19% y/y).
Agriculture: We anticipate softer momentum in the agricultural sector (+1.57% y/y in Q1-26 | Q4-25: +4.00% y/y). This is likely to be underpinned by the tapering of harvest activities following the main harvest season in Q4-25, as well as the onset of dry season farming in Q1-26, resulting in lower crop output volumes during the period. In addition, livestock farming is expected to face seasonal headwinds during the dry season lean period, characterised by higher feed and water costs as well as increased herd migration in search of pasture. These factors are likely to constrain output growth within the subsector.
Services: Growth across the trade, ICT, and transportation sectors is expected to moderate in Q1-26, reflecting the normalisation of consumer demand following the festive driven surge in Q4. Nonetheless, continued digital adoption, firmer naira, easing cost pressures, and strengthening business confidence should provide a supportive operating environment, keeping growth broadly resilient.
The real estate sector is likely to remain subdued, constrained by persistently elevated financing costs, notwithstanding recent macroeconomic stabilisation. Although the monetary authority has initiated policy easing, borrowing costs remain relatively high and overall liquidity conditions are still tight, which could continue to weigh on private sector credit expansion and constrain growth within the broader financial services segment in the near term.
Conversely, we expect the insurance subsector to remain resilient, supported by steady growth in compulsory insurance penetration (e.g., motor and group life policies) and stronger investment income amid still elevated yields on fixed income instruments. Overall, we project the services sector to expand by 4.53% y/y in Q1-26 (Q4-25: +4.15% y/y).
Manufacturing: Activity in the food, beverage, and tobacco subsector is expected to moderate in Q1-26, reflecting the unwinding of festive driven demand that supported output in the preceding quarter. Nonetheless, growth in the sector is likely to remain resilient, reflecting relatively moderate cost pressures. Meanwhile, the cement industry is likely to record firmer growth, supported by a seasonal pickup in construction activity during the dry season, which typically enhances site accessibility, improves logistics, and accelerates project execution. On balance, we project the manufacturing sector to expand by 1.74% y/y in Q1-26 (Q4-25: +1.13% y/y).
Given our projections for both the oil and non-oil sectors, we expect real GDP growth to settle at 3.64% y/y in Q1-26, with 2026FY growth averaging at 4.20% y/y (vs. +3.87% y/y in 2025FY).
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