The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s economy cannot achieve durable structural transformation without a stronger manufacturing base, despite the country recording improved GDP growth in the first quarter of 2026.
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The position was contained in the organisation’s latest policy brief seen by Nairametrics.
The report follows the release of new data by the National Bureau of Statistics showing that Nigeria’s real Gross Domestic Product (GDP) grew by 3.89% year-on-year in Q1 2026, compared to 3.13% recorded in the corresponding period of 2025.
What they are saying
According to the CPPE, the latest GDP figures reflect improving macroeconomic stability and resilience in trade and services, but the weak performance of manufacturing and the sharp contraction in electricity supply remain major structural concerns.
- “Industrialization remains the most sustainable pathway to large-scale job creation, export competitiveness and inclusive growth,” the group stated.
- “The economy cannot achieve durable structural transformation without a stronger manufacturing base.”
The manufacturing sector expanded by 3.29% in Q1 2026, improving from 1.13% recorded in Q4 2025.
The growth was supported by stronger activity in petroleum refining, food and beverages, cement, chemicals, and pharmaceuticals.
However, the sector’s contribution to GDP remains below 10%, constrained by high energy costs, elevated interest rates, inadequate infrastructure, logistics bottlenecks, and policy uncertainty.
The CPPE also highlighted what it described as a major structural imbalance in the Nigerian economy.
According to the group, while the non-oil sector contributes about 96.08% of GDP, it accounts for less than 15% of foreign exchange earnings, reflecting weak export competitiveness and limited participation in global value chains.
Meanwhile, growth in the oil and gas sector slowed to 2.57% in Q1 2026 from 6.79% recorded in Q4 2025, with crude oil production remaining below national output targets and budget assumptions.
Get up to speed
Nigeria’s economy continued to expand across major sectors during the quarter, supported by stronger agricultural activity, industrial output, and sustained services sector growth.
- In nominal terms, aggregate GDP at basic prices rose to N110.79 trillion in Q1 2026 from N94.05 trillion in the corresponding period of 2025, representing nominal year-on-year growth of 17.79%.
- The services sector remained the largest contributor to economic activity, accounting for 57.73% of GDP.
- Sub-sectors such as information and communications technology (ICT), financial services, and entertainment posted double-digit growth during the quarter.
Trade emerged as the single largest contributor to GDP at 17.89%, supported by improved foreign exchange liquidity and moderating inflationary pressures.
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The report identified oil refining as the fastest-growing sector in the quarter, recording expansion of 37.46%.
The CPPE attributed much of the growth to the operations of Dangote Petroleum Refinery, noting that the refinery is helping to reshape Nigeria’s energy landscape by boosting local value addition and reducing dependence on imported fuel products.
However, the group cautioned that long-term economic transformation cannot rely solely on commerce and services.
The CPPE expressed concern over the 15.30% contraction recorded in the electricity and gas sector, describing it as the sharpest decline in recent years.
According to the organisation, the decline reflects persistent structural weaknesses across power generation, transmission, distribution, sector liquidity, and governance.
- “A contraction of this magnitude signals persistent structural weaknesses across generation, transmission and distribution, as well as continuing liquidity and governance challenges within the power sector,” the group stated.
- “Without reliable, affordable and stable electricity, gains recorded in other sectors may prove difficult to sustain.”
The report also noted that the aviation sector contracted by 7.62%, while the textile industry remained in prolonged recession, reflecting deeper concerns around deindustrialisation and weakening domestic productive capacity.
The CPPE warned that the decline of labour-intensive industries could worsen unemployment, reduce household incomes, and deepen poverty levels.
The organisation concluded that the next phase of economic reforms must focus on productivity enhancement, industrialisation, power sector reforms, and export competitiveness.
According to the CPPE, economic growth without broad-based inclusion would deliver limited social and economic benefits.
What you should know
Nairametrics had earlier reported that Nigeria’s economy expanded by 4.07% year-on-year in real terms in the fourth quarter of 2025, compared to 3.76% recorded in Q4 2024.
The stronger Q4 performance contributed to full-year GDP growth of 3.87% in 2025, up from 3.38% recorded in 2024.
