Yemisi Izuora
An economist and Cowry Asset Management Chief Executive Officer Johnson Chukwu, has projected that Nigeria’s economy is likely to post another quarter of steady expansion in the second quarter between 3.98 per cent and 4.03 per cent.
Chukwu, however warned that rising energy costs, insecurity, weak infrastructure investment and broader global uncertainty could still weigh on momentum.
Speaking CNBC in a television interview on Nigeria’s near-term economic outlook, he said the firm’s forecast is anchored on the sectors that have continued to drive the country’s output growth, particularly agriculture, telecommunications and construction-linked activity.
He however downplayed the impact of oil and gas on near-term aggregate growth, noting that the sector now contributes only about 3.5 per cent to GDP.
As a result, even sizeable movement in oil output would have less influence on overall growth than sustained expansion in non-oil sectors such as agriculture, trade, telecoms, real estate and manufacturing.
The projection underscores the increasingly diversified nature of Nigeria’s growth story, where non-oil sectors continue to drive output despite persistent structural constraints. But it also highlights the fragility of that expansion.
Cowry Asset’s caution over energy prices, insecurity, weak infrastructure spending and global uncertainty points to risks that could temper business activity, household spending and investment if conditions worsen.
For now, however, the investment firm is maintaining its view that Nigeria’s economy will expand at just under or slightly above 4 per cent in the second quarter, supported by resilient farm output, strong demand for digital services and a likely pre-election surge in public construction activity.
Investors and policymakers will now be watching official second-quarter GDP data to assess whether those sectoral tailwinds were strong enough to offset the economy’s longstanding bottlenecks and keep growth on a modest upward trajectory.
The forecast comes against the backdrop of a 3.89 per cent GDP expansion in the first quarter of 2026, which Chuku said was powered largely by strong performances in telecommunications, agriculture and real estate. According to him, telecoms grew by about 10.9 per cent in the first quarter, while agriculture expanded by roughly 3.15 per cent, with real estate also posting robust growth of around 8.5 per cent.
Chuku said understanding the first quarter composition of growth is critical to explaining why Cowry Asset expects Nigeria to maintain, and marginally improve on, that pace in the April-to-June period.
He noted that a handful of large sectors account for the bulk of economic activity and therefore have an outsized impact on headline GDP. Agriculture, trade, telecommunications and real estate together represent more than 70 per cent of total output, he said, and when manufacturing is added, the share rises to about 80 per cent.
In his view, as long as these core sectors remain in expansion territory, overall GDP growth is likely to stay firm.
For the second quarter, Chuku said agriculture should remain a major support despite concerns that seasonal patterns heading toward the rainy season could disrupt output.
He argued that the April-to-June window still benefits from the availability of harvested produce, including early cereals such as corn, helping to sustain activity in the farm economy and support broader growth.
He pointed to strong crop production in the first quarter, which he said rose by more than 17 per cent, as evidence that food supply conditions had improved. That trend, he added, could continue into the second quarter as more early harvests reach markets. In turn, this could help ease food inflation while also boosting agriculture’s contribution to GDP.
Because agriculture accounts for about 23 per cent of Nigeria’s GDP, Chuku said even modest resilience in the sector can materially shape the national growth profile. The sector remains especially important in an economy where household consumption is closely tied to food prices and rural livelihoods.
Telecommunications is also expected to stay on a strong growth path, according to Cowry Asset. Chuku said rising demand for data, voice services and online advertising should support further expansion in the sector. He linked part of that strength to increasing virtual communication as political activity intensifies ahead of Nigeria’s general elections.
Campaign-related outreach, digital advertising and broader use of virtual platforms by businesses and political actors are likely to provide additional tailwinds for telecom operators, he said. In recent years, telecoms has become one of Nigeria’s most resilient growth engines, benefiting from the country’s young population, expanding digital adoption and the central role of connectivity in commerce and communication.
Another pillar of Cowry Asset’s forecast is construction, particularly at the subnational level. Chuku said governors seeking re-election or attempting to demonstrate performance ahead of the polls are likely to accelerate visible infrastructure projects, especially roads, as part of efforts to persuade voters.
He said stronger Federation Account Allocation Committee disbursements have improved fiscal capacity for many states, creating room for more contracts to be awarded. In his assessment, some of those projects may be politically motivated and not all may be completed, but the immediate effect would still be an increase in construction activity, contractor mobilization and related economic output in the second quarter.
Road building and other highly visible public works are likely to dominate because they are easy for voters to identify during campaigns, he said. That dynamic, while tied to election incentives, could still provide a short-term boost to GDP through construction spending, procurement and employment effects.
Still, Cowry Asset does not see all sectors contributing equally.
Chuku said manufacturing is likely to remain under pressure and may, at best, perform around first-quarter levels rather than deliver a major upside surprise. He cited several constraints facing factories, including high energy costs, infrastructure deficits, supply chain bottlenecks and elevated financing costs.
Those challenges have continued to squeeze margins and cap output in one of the sectors that would ordinarily be expected to play a larger role in broad-based growth. While other industries such as entertainment may record improvements, Chuku noted that their weight in the GDP basket is comparatively small and therefore unlikely to move the headline figure significantly.