Nigeria's economy expanded at a disappointing pace during the first quarter, falling short of expectations as both oil and non-oil sectors showed slower growth. This underperformance indicates broader economic challenges facing Africa's largest economy. The deceleration suggests potential headwinds for investors who had anticipated more robust expansion in the initial months of the year.

The oil sector, Nigeria's economic backbone, experienced reduced output during the quarter. This slowdown in petroleum production directly contributed to the overall GDP underperformance. Oil accounts for approximately 90% of foreign exchange earnings and 70% of government revenue, making this sector's performance particularly critical to the nation's economic stability.

Non-oil sectors also failed to compensate, growing at a modest rate that disappointed market observers. Services, manufacturing, and agriculture all showed limited momentum, reflecting persistent structural challenges. This dual-sector weakness indicates systemic issues rather than isolated problems, complicating economic diversification efforts central to policy discussions.

The Q1 results place Nigeria's annual growth targets at risk, potentially requiring policy adjustments from the central bank and finance ministry. Investors will now recalibrate expectations, with particular focus on fiscal responses and infrastructure development plans that could address current economic sluggishness.