Nigeria’s power sector shrinks 10.63%, contracts for second straight quarter

Nigeria’s electricity, gas, steam and air-conditioning supply sector contracted for the second consecutive quarter in 2026, shrinking by 10.63% year-on-year in real terms in Q2.

This is according to the latest Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS).

The contraction, although an improvement from the 15.30% decline recorded in Q1 2026, highlights continued weakness in one of the economy’s most critical infrastructure sectors.

The performance contrasts sharply with the broader economy, which grew by 4.43% in real terms in Q2 2026, up from 4.23% in the corresponding quarter of 2025.

What the data is saying

The NBS data shows that the sector’s real output continued to decline despite an increase in its nominal value.

• In nominal terms, the electricity, gas, steam and air-conditioning supply sector grew by 0.87% year-on-year in Q2 2026, compared with 4.98% in Q1.
• The sector’s nominal value rose from N324.83 billion in Q1 to N1.26 trillion in Q2, reflecting the difference between nominal economic value and real output.

The continued real contraction suggests that higher nominal values have not translated into stronger underlying sector activity.

Get up to speed

Electricity supply remains a major constraint on Nigeria’s productive capacity. Manufacturers, businesses and households continue to depend on the national grid alongside diesel- and petrol-powered generators to meet their energy needs.

• The latest performance points to persistent structural challenges across the electricity value chain, including inadequate generation and transmission capacity, gas supply constraints, ageing infrastructure and liquidity problems affecting market participants.
• These challenges can increase operating costs for businesses, limit industrial production and weaken productivity,…