Nigeria’s real Gross Domestic Product expands by 4.43 percent in the second quarter of 2026, while Nigerian Exchange (NGX) Weekly Market report for the week ending 28 August 2026 increased by 0.81 percent and 0.84 percent, but the effect of the rising figures are far from being felt by ordinary Nigerians
By Edu Abade
Nigeria’s real Gross Domestic Product (GDP) grew by 4.43 percent year-on-year in the second quarter of 2026, up from 4.23 percent in the corresponding quarter of 2025. This growth was driven primarily by the services sector, which expanded by 4.60 percent and accounted for 56.62 percent of aggregate real GDP.
Figures released by the National Bureau of Statistics (NBS), indicate that the agricultural sector also recorded strong growth, growing by 4.39 percent, compared with 2.82 percent in the same quarter of the previous year.
In the oil sector, real output increased by 7.31 percent year-on-year, supported by an increase in average daily crude oil production of 1.72 million barrels per day. In contrast, industrial growth declined to 3.96 percent, down from 7.46 percent in the second quarter of 2025, while the non-oil sector expanded by 4.31 percent in real terms.
According to report by the Centre for the Study of the Economies of Africa, CSEA, these figures demonstrate the resilience of the Nigerian economy, with growth largely driven by the services, agriculture, and oil sectors. However, the slowdown in industrial growth points to persistent structural and operational challenges that require policy attention to ensure balanced and sustainable economic development. Moreover, the non-oil sector’s contribution of 95.84 percent to real GDP underscores its pivotal role as the principal driver of economic activity.
To sustain this growth momentum, the government should implement targeted policies aimed at revitalising the manufacturing and broader industrial sectors. Increased investment in agricultural infrastructure, alongside improved security in farming communities, will be essential to consolidate recent gains in agricultural productivity.
At the same time, maintaining stable crude oil production while fostering a conducive business environment for the services and non-oil sectors will be critical to promoting inclusive and long-term economic growth.
Besides, the Nigerian Exchange, NGX, All Shares Index, ASI, gained 0.81 percent despite a shortened trading week occasioned by a public holiday. The NGX Weekly Market report for the week ending 28 August 2026, showed that All-Share Index (ASI) and market capitalization increased by 0.81 percent and 0.84 percent respectively, closing at 241,298.47 and ₦155.826 trillion.
The positive performance occurred despite the shortened four-day trading week occasioned by the public holiday declared for Eid el Maulud. However, overall equity market activity weakened considerably, with total turnover falling to 2.507 billion shares valued at ₦123.223 billion, compared with 6.242 billion shares worth ₦157.764 billion recorded in the previous week.
The financial services sector remained the dominant contributor, accounting for 78.87 percent of total equity turnover volume, followed by the services and ICT sectors. In the debt market, 164,122 bond units were traded, while FGN Savings Bonds issued in July 2026 were also listed.
The rise in the ASI and market capitalization suggests that investor confidence and buying interest in selected equities remained relatively strong despite the shorter trading week. Nevertheless, the sharp decline in trading volume and value indicates weaker market liquidity and highlights the sensitivity of market activity to disruptions in the trading calendar.
The high concentration of trading in the financial services sector also points to an uneven distribution of liquidity, with relatively limited investor participation in other sectors, especially the real sector.
To broaden market participation and reduce sectoral concentration, the NGX and SEC should promote market-making and investor-awareness initiatives in less-traded sectors to diversify liquidity and participation. The Debt Management Office (DMO) should expand access to retail-oriented instruments such as FGN Savings Bonds through digital platforms and commercial banks.
Meanwhile, the Federal Government of Nigeria (FGN) has entered a landmark agreement with First Abu Dhabi Bank PJSC (FAB) for a structured US$5 billion Total Return Swap (TRS) facility. Governed by the ISDA Master Agreement, the facility forms an important component of Nigeria’s strategy to diversify its funding sources and access international capital markets. The six-year facility includes a three-year break clause and is collateralized by naira-denominated FGN securities at a 133.3 percent coverage ratio. Pricing is set at SOFR plus 3.95 percent for the first tranche and SOFR plus 4.00 percent for subsequent tranches, with disbursements made through phased mutual drawdowns.
A report by the CSEA expressed confidence that the facility is expected to provide substantial foreign exchange inflows, ease fiscal pressures, support budget implementation and finance critical infrastructure. Using part of the proceeds to refinance higher-cost domestic and external debt could also help reduce debt-service costs and improve the efficiency of the government’s debt portfolio. However, the significant reliance on domestic securities as collateral exposes the government to refinancing, market and currency-related risks, which will require careful debt and treasury management.
It advised the Debt Management Office (DMO) to strengthen transparency by publishing regular reports on drawdowns, collateral requirements and the utilisation of the proceeds. The government should also prioritise projects with high economic and social returns and, where feasible, use part of the facility to refinance more expensive debt.
Strong fiscal discipline and effective risk management will be essential to ensure that the facility improves debt sustainability and contributes to inclusive economic growth.
