Analysts Project Stronger Growth Despite Energy, Infrastructure Challenges

Nigeria’s economy sustained its growth momentum in the first quarter of 2026, with real Gross Domestic Product (GDP) expanding by 3.89 per cent year-on-year, reinforcing analysts’ expectations of stronger economic performance through the rest of the year.

The latest GDP report released by the National Bureau of Statistics showed that the economy grew faster than the 3.13 per cent recorded in the corresponding period of 2025, although slightly below the 4.07 per cent growth achieved in the fourth quarter of 2025.

Reacting to the data, analysts at Cowry Asset Management Limited said the performance aligned with their forecast and reflected the resilience of the domestic economy despite prevailing global uncertainties and lingering structural constraints.

According to Cowry Research, the sustained growth trajectory was largely driven by strong performance across key non-oil sectors, particularly Information and Communication, especially Telecommunications, alongside Agriculture, Trade, Manufacturing, Financial Services, Construction, Real Estate and Transportation.

The research firm noted that Nigeria has now maintained GDP growth above the 3.0 per cent threshold since the second quarter of 2024, with average growth estimated at about 3.6 per cent between Q1 2024 and Q1 2026.

Cowry Research attributed the sustained expansion to the gradual impact of ongoing economic reforms, improved stability in the foreign exchange market, rising investor confidence and easing inflationary pressures recorded earlier in the year.

The analysts expressed optimism that economic activities would remain moderately resilient in the coming quarters, supported by continued expansion in Telecommunications, Financial Services, Agriculture, Transportation, Water Supply and selected manufacturing segments.

“Economic fundamentals continue to show signs of gradual strengthening, particularly within the non-oil economy, which remains the major driver of growth,” the report stated.

Based on current economic trends, Cowry Research projected that Nigeria’s real GDP growth would settle between 3.98 per cent and 4.03 per cent in the second quarter of 2026, while maintaining its full-year growth forecast of 4.12 per cent.

The firm, however, cautioned that rising geopolitical tensions and external shocks could pose downside risks to the economy in subsequent quarters. It specifically highlighted concerns surrounding tensions around the Strait of Hormuz and the resulting pressure on global energy prices, which could worsen domestic inflationary conditions and weaken economic stability.

Cowry Research also identified elevated energy costs, insecurity, weak infrastructure investment and persistent global uncertainty as major headwinds capable of constraining growth momentum.

Despite these challenges, analysts maintained that the resilience of the non-oil sector, combined with ongoing reforms and relative macroeconomic stability, would likely keep Nigeria on a moderate growth path throughout 2026.