ICT Retains Crown as Nigeria’s Fastest-Growing Sector with 10.98% Expansion in Q1 2026

Nigeria’s Information and Communications sector has solidified its position as the primary engine of the nation’s economic recovery.

Fresh analysis of the Q1 2026 national accounts released by the National Bureau of Statistics (NBS) reveals the sector recorded an impressive 10.98% year-on-year expansion, accelerating significantly from the 7.40% growth recorded in the same period of 2025.

This remarkable performance marks 33 consecutive quarters of growth for the tech and digital ecosystem, underscoring its unique resilience against persistent macroeconomic headwinds, high energy costs, and compressed household wallets.

According to market analysts, this multi-quarter expansion streak is fundamentally driven by:

• Relentless momentum in mobile telecommunications services.
• Exponentially rising data consumption patterns across retail and enterprise segments.
• A systemic surge in digital financial transactions.
• The deepening integration of digital commerce tools across traditional corporate networks.

Non-Oil Sector Dominates as Broad Economy Expands

The broader Nigerian economy expanded by 3.89% year-on-year in Q1 2026, outperforming the 3.13% growth recorded in Q1 2025. The non-oil sector remained the clear heavyweight, accounting for roughly 96% of total economic output and expanding by 3.94% during the quarter.

Q1 2026 Growth Velocity by Key Sector (YoY):

• [Info & Comm] ───> 10.98% (Fastest Growing)
• Finance & Ins   ───> 8.54%
• Transport/Storage──> 7.41%
• Construction   ───> 6.38%
• Broad Services ───> 4.31%
• Manufacturing   ───> 3.29%
• Agriculture     ───> 3.15%

While Services led aggregate performance with a 4.31% jump, Finance and Insurance emerged as the second-fastest growing sub-sector at 8.54%. Though this represents a normalization from the high-base peak of 15.03% in Q1 2025, the financial sector continues to reap significant windfall earnings from the Central Bank of Nigeria’s (CBN) aggressive, high-interest monetary policy stance.

Private Sector Confidence Surges into Q2: May PMI Hits 9-Month High

This Q1 macroeconomic data aligns seamlessly with forward-looking operational metrics on the ground. The latest Stanbic IBTC Bank Purchasing Managers’ Index (PMI) data indicates that private sector momentum accelerated sharply in May 2026, with the headline index climbing to 54.1 points from 52.4 in April.

This marks the healthiest business environment reading since August 2025, driven by an expansion in domestic output (56.6) and rapid new order pipelines (57.0) as companies commercialized new product lines to capture recovering customer demand.

“Private sector activity in Nigeria improved to its best level in nine months… This impressive business condition was primarily due to accelerated expansion in both output and new orders as evidence pointed to improving customer demand and the launch of new products,” noted Muyiwa Oni, head of Equity Research for West Africa at Stanbic IBTC Bank.

The Aviation and Corporate Credit Risk Factors

Despite widespread recovery, the structural data points to stark realities in sectors heavily exposed to direct foreign exchange costs and pricing adjustments:

The Aviation Slump: The air transportation segment experienced a severe 7.62% year-on-year contraction in Q1 2026, worsening from a minor 0.81% dip in Q1 2025. Analysts attribute this drop directly to systemic cost pressures facing domestic airlines and weakening passenger volumes triggered by recent aviation tax adjustments.

The Credit Squeeze: While elevated net interest margins have temporarily boosted bank profitability, financial experts caution that prolonged exposure to high borrowing costs will inevitably limit private sector credit expansion, creating growth friction for capital-intensive enterprises later in the year.

2026 Macro Outlook and Forecast Revisions

Reflecting the softer-than-expected non-oil GDP performance early in the year, Stanbic IBTC has marginally adjusted its full-year 2026 economic growth projection to 4.13% y/y (down from an initial estimate of 4.22%), though independent consensus estimates maintain optimism closer to 4.3%.

Looking ahead, economic liquidity is expected to find strong buffers from accelerated capital projects, a steadying foreign exchange environment, and a historical rise in domestic liquidity and infrastructure interventions typically preceding the 2027 election cycle.

However, market observers emphasize that the core policy challenge remains shifting these positive headline GDP numbers into tangible adjustments in consumer purchasing power, job creation, and poverty reduction.

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