DistantNews
Support us
🇳🇬 Nigeria /Economy & Trade

Oil output, reforms sustain Nigeria’s economic growth – OPEC

From The Punch · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Nigeria's economy shows positive growth, supported by reforms and steady oil production, according to OPEC.
  • The non-oil sector, including agriculture and manufacturing, is the primary driver of this expansion.
  • Higher oil output boosts fiscal revenues and foreign exchange, while improved domestic refining capacity eases import pressures.

Nigeria's economic outlook remains robust, bolstered by macroeconomic stability, consistent oil production, and ongoing reforms, OPEC reported. The nation's economy grew 3.9% year-on-year in the first quarter of 2026, a slight decrease from the previous quarter's 4.0%, indicating growth is near recent peaks.

The non-oil economy continues to be the main engine of growth, with agriculture, manufacturing, construction, trade, and finance sectors leading the way. Increased oil output has also positively impacted fiscal revenues, foreign exchange inflows, and external reserves.

The economy expanded by 3.9 per cent, year-on-year, in 1Q26, only slightly below the 4Q25 pace of 4.0 per cent, confirming that growth remains close to recent highs.

— OPECOPEC's assessment of Nigeria's economic growth in the first quarter of 2026.

Survey indicators suggest private-sector activity is maintaining momentum, though moderating. The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index eased to 52.5 in July, the lowest since March but still indicating expansion for the sixth consecutive month. Firms reported increased new orders, driven by better customer demand, competitive pricing, and new product launches, leading to modest rises in output and employment.

Higher domestic refining capacity, including improved fuel supply from the Dangote refinery, should continue to support energy availability and reduce some import-related pressures.

— OPECOPEC's outlook on the impact of increased domestic refining capacity.

Furthermore, enhanced domestic refining capacity, particularly from the Dangote Petroleum Refinery, is expected to improve energy availability and reduce reliance on imported petroleum products. The refinery's significant capacity is already contributing to locally refined products.

Inflationary pressures are showing signs of softening, with headline inflation at 15.9% in June and May. While input costs saw some moderation in July, higher fuel and raw material costs remain a challenge for businesses. Overall, Nigeria's near-term economic outlook is positive.

The July PMI pointed to softening input costs, despite higher fuel and raw material costs.

— OPECOPEC's observation on input costs and inflation.
DistantNews Editorial

Originally published by The Punch. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog