Advertisement
Power Sector Contracts 10.63% in Q2 – NBS
Nigeria’s electricity, gas, steam and air-conditioning supply sector contracted by 10.63% year-on-year in real terms in Q2 2026, marking its second consecutive quarterly decline, according to the National Bureau of Statistics (NBS).
The contraction, though an improvement from the 15.30% drop in Q1, underscores persistent weakness in one of the economy’s most critical infrastructure sectors. This contrasts with the broader economy, which grew 4.43% in real terms in Q2, up from 4.23% in Q2 2025.
NBS data showed that while the sector’s nominal value rose sharply—from ₦324.83bn in Q1 to ₦1.26tn in Q2—its real output continued to decline, highlighting that higher nominal values have not translated into stronger activity.
Electricity supply remains a major constraint on Nigeria’s productive capacity. Manufacturers, businesses and households continue to rely on the national grid alongside diesel and petrol generators, raising costs and limiting productivity.
Structural challenges across the electricity value chain—including inadequate generation and transmission capacity, gas supply constraints, ageing infrastructure and liquidity problems—were cited as key drivers of the contraction.
The decline reverses gains recorded in 2025, when electricity generation rose 10.92% in Q1, supported by improved performance of thermal and hydropower plants. However, those improvements have not translated into sustained growth.
Despite the challenges, the sector generated ₦62.12bn in Company Income Tax in 2025, underscoring its significant economic footprint. Analysts warn that without reforms, power sector weakness could slow Nigeria’s overall economic expansion.
