Nigeria’s Economy Shows Mixed Signs of Growth

Nigeria’s economy managed a 3.89 per cent growth rate in the first quarter of 2026, a rate that is better than the 3.13 per cent seen in the same period of 2025, but still shows a worrying cooling effect compared to the 4.07 per cent recorded at the end of last year. The numbers reveal a cooling effect, and economists are pointing out that the pace isn't matching the speed at which our population is growing.

Prof. Pat Utomi, a co-founder of the Lagos Business School, argues that the current approach is simply not aggressive enough. He believes the Federal Government must stop looking at the economy as one giant, uniform block and start treating our regions like specialized business hubs. According to Utomi, the government should support the harnessing of factor endowments and their value chains in various regions of the country.

Utomi suggests that if the state wants to see real transformation, it needs to borrow a page from China’s playbook. This means picking specific winners in different regions—like pushing hard on gum Arabic in the North-West or sesame in the North-Central—and wrapping them in protective policies that allow these businesses to scale up for export before opening them up to the global competition. In fact, creating "value chains" means processing these goods locally rather than shipping them out in their basic form, which is where the real money is usually lost. Without these industrial and business clusters, we remain stuck in a cycle of importing what we could easily produce.

Prof. Tunde Adeoye from the University of Lagos takes a slightly different angle, pointing directly at the state of our farms and the power grid. He argues that even if you have the best ideas, you cannot build an industrial economy if the machines don't have electricity to run.

Fixing the Fundamentals

  • The National Bureau of Statistics reported a year-on-year real growth of 3.89 per cent for Q1 2026.
  • Total agricultural output remains below potential due to a lack of modern, subsidised equipment.
  • Power supply issues continue to drive up production costs, making locally made goods expensive.
  • Industrial clustering is proposed as a way to bundle infrastructure and boost efficiency.
  • Expert advice emphasizes that population growth now outpaces current economic expansion rates.

Adeoye believes that the government needs to put its money where its mouth is regarding agricultural inputs. If farmers can access subsidised tools and high-quality seeds, the entire value chain—from harvest to processing—will see a massive jump in productivity. This isn't just about feeding the nation; it's about creating raw materials for our factories to turn into finished goods.

Infrastructure renewal, specifically for electricity, remains the biggest headache for the manufacturing sector. When businesses have to spend a large portion of their budget on diesel just to keep the lights on, they can't compete with international brands. Adeoye insists that if the government redirects its budgetary votes to stabilize power, the cost of production would naturally drop.

The latest report from the National Bureau of Statistics shows that even though we are technically growing, the growth is moderate. The 4.31 per cent growth figure reflects a slight dip from the 4.33 per cent seen in the same period last year, showing that the momentum is stalling. Without a deliberate strategy to harness regional strengths and fix the power sector, we are essentially running on a treadmill. This makes the debate about the government's approach even more urgent.

As for the choice facing the policymakers, it's clear that they must decide between continuing with the status quo or building the specialized industrial base that experts like Utomi and Adeoye say is the only way to sustain our long-term economic stability. The answer to this question will decide whether jobs become easier to find or if the cost of living continues to stretch our pockets.