The total of what the entire country spends, the income Nigerians realise, or the total production by Nigeria’s populace forms the Gross Domestic Product (GDP), which gives us the 4.43% recorded in Q2 2026. This surpassed Q1 2026 and the year-on-year figure; in fact, it is the highest GDP growth recorded in the last five years.
The question is: who spent the money? Using the expenditure approach to calculate GDP, it is measured by adding up final goods and services. The basic economic formula for the GDP expenditure approach is consumer spending, investment, government spending and exports, minus imports into Nigeria. This simply means that as Nigerians buy food and clothes, companies build factories, the government builds roads, and Nigeria exports crude oil, among other activities, all these contribute to the GDP figure of 4.43% for Q2 2026.
The production or output approach measures what Nigeria produces in sectors such as agriculture, manufacturing, oil and gas, trade, telecommunications, ICT, real estate, health and education, among others. The income approach to measuring GDP considers the income generated from economic production, such as salaries and wages, profits earned, interest, and taxes on production and products.
The 4.43% figure for Nigeria’s Q2 real GDP is encouraging, as it surpasses the year-on-year figure for 2025 (4.23%) and the Q1 figure for 2026 (3.89%). The overall reason we must agree that it is positive is that it is the highest figure in the last five years. This singular reason marks it as the fastest quarterly expansion in five years.
However, looking at the numbers further, we need to examine which sector is giving us the highest GDP and how it benefits Nigeria, or how Nigerians and policymakers can further use it as a tool for a better GDP in the future.
According to the NBS Q2 2026 GDP report, the services sector contributed 56.62% of Nigeria’s real GDP in Q2 2026. The services sector also grew by 4.60% year-on-year in Q2 2026, compared with 3.94% in Q2 2025. The figure below simply means that more than half of Nigeria’s economic output now comes from services, which include activities such as financial services, professional services, entertainment, trade, ICT and telecommunications.
Nigeria needs to improve on what can create more employment opportunities and jobs. We must start to look at the quality of jobs we are creating through the service sector, how many Nigerians they employ, how they pay Nigerians, and whether the service sector would raise productivity and household income.
The manufacturing sector is weak in this Q2 compared to Q1, which is a sign that GDP growth does not create jobs. We normally call such a scenario jobless growth. The 2025 Q2 GDP for industry was 7.46%, while the same period in Q2 2026 was 3.96%. The growth in 2025 almost halved in 2026. This is a red flag for economists, as growth in the service sector cannot create jobs or reduce poverty at the same level as significant growth in manufacturing, construction and other sectors.
For growth to reduce poverty, it must happen in sectors that employ millions of Nigerians. The sectors that Nigeria relies on for livelihoods, such as agriculture and manufacturing, are either regressing or expanding too slowly to outpace population growth.
Energy remains the main reason Nigeria’s manufacturing growth remains slow. With grid collapse and high operational costs, when the national grid fails to supply stable electricity, the productive sector suffers heavily. The electricity and gas supply sector contracted by 10.63% year-on-year in real terms during Q2 2026. This marks the second consecutive quarter in which the electricity sector has shrunk.
This simply means manufacturers have to spend more on self-generated power through diesel, PMS and alternative gas plants. These massive overhead costs have forced the manufacturing sector’s contribution to shrink, coupled with the reality of interest rates that are discouraging manufacturers and small businesses in Nigeria.
Nigeria’s population growth makes the 4.43% GDP growth appear almost non-existent. For a nation under extreme demographic pressure, with more than five million babies born yearly, to grow and end poverty, it must achieve at least a 10% sustainable GDP growth rate for a decade. To meet President Tinubu’s $1 trillion economy target, we must do more to achieve better GDP growth, except we want to achieve it by the year 2061 with 4% GDP growth, which is roughly 35 years from now.
Nigeria must boost its local production by focusing on the industrial sector to increase production in the manufacturing sector, strengthen small businesses, boost construction and expand the mining sector by providing adequate electricity, gas and all the energy needed by these sectors.
The government must also stop sacrificing growth by ensuring there are affordable credit facilities with lower interest rates for industries in Nigeria to push production beyond where we are now and, in turn, employ Nigerians, giving them more disposable income and purchasing power beyond this 63% poverty line in Nigeria, which simply means approximately 140 million Nigerians living below the poverty line amid elevated living costs and weak household income.
Aliyu Ilias, Ph.D.
Chief Economist, CSAL Advisory writes from Abuja
