ABUJA, Sept 1 – Nigeria’s power sector contracted by 10.63% year-on-year in real terms in the second quarter of 2026, marking its second consecutive quarterly decline, according to the latest Gross Domestic Product (GDP) report from the National Bureau of Statistics (NBS).
The decline was an improvement from the 15.30% contraction recorded in the first quarter, but it shows that the electricity, gas, steam and air-conditioning supply sector remains under pressure despite growth across the wider economy.
Nigeria’s economy grew by 4.43% in real terms in Q2 2026, up from 4.23% in the same period of 2025. The power sector, however, continued to record weaker real output.
In nominal terms, the sector grew by 0.87% year-on-year in Q2, compared with 4.98% in Q1. Its nominal value also increased from N324.83 billion in the first quarter to N1.26 trillion in the second quarter, highlighting the difference between the sector’s monetary value and its actual output.
The continued decline in real output points to ongoing problems across Nigeria’s electricity value chain. Electricity generation and transmission capacity remain limited, while gas supply constraints, ageing infrastructure and liquidity problems continue to affect operators across the market.
For manufacturers, businesses and households, unreliable electricity supply means continued dependence on the national grid alongside diesel and petrol-powered generators. This can raise operating costs, restrict industrial activity and affect productivity.
The latest figures also reverse some of the improvement recorded in 2025. Electricity generation rose by 10.92% in the first quarter of 2025, supported by better availability and operating performance from thermal and hydropower plants. Thermal plants accounted for most of the increase, with 16 of the 23 thermal plants connected to the national grid recording higher average hourly output than in the previous quarter.
The more recent GDP figures suggest those gains have not translated into sustained real growth in the power sector.
Despite its challenges, the sector remains economically significant, generating N62.12 billion in Company Income Tax in 2025.
Nigeria’s broader economic outlook remains positive, with the World Bank maintaining its 4.4% growth forecast for 2027. S&P Global Ratings has also upgraded Nigeria’s long-term foreign and local currency credit ratings to ‘B’ from ‘B-’.
