Nigeria’s Electricity Sector Shrinks 10.63% as Real Output Falls N66.8bn

Nigeria’s electricity sector contracted by 10.63 percent in the second quarter (Q2) of 2026, wiping about N66.85 billion from its inflation-adjusted output despite the broader economy expanding by 4.43 percent during the period.

Data from the National Bureau of Statistics (NBS) showed that real output from Electricity, Gas, Steam and Air Conditioning Supply fell to N561.76 billion in Q2 2026 from N628.61 billion in the corresponding quarter of 2025.

The difference represents a year-on-year decline of approximately N66.85 billion at constant 2019 prices.

The contraction extended the weakness recorded in the sector at the beginning of the year.

Electricity, gas, steam and air conditioning supply contracted by 15.30 percent in Q1 2026, before narrowing to a 10.63 percent decline in the second quarter.

This marks a sharp reversal from 2025, when the sector expanded by 18.65 percent in the first quarter and 11.47 percent in the second quarter.

The decline stands in contrast to the performance of the broader Nigerian economy.

Real GDP grew 4.43 percent year-on-year in Q2, accelerating from 3.89 percent in Q1 and 4.23 percent in the corresponding quarter of 2025.

Agriculture expanded 4.39 percent, services grew 4.60 percent and industry recorded growth of 3.96 percent.

This means electricity remained in contraction even as all three broad segments of the economy recorded positive growth.

The sector’s performance was also considerably weaker than several other industrial activities.

Manufacturing expanded by 3.24 percent, construction grew 6.75 percent, while water supply, sewerage, waste management and remediation recorded real growth of 11.24 percent.

The electricity sector’s contribution to real GDP nevertheless increased to 1.05 percent in Q2 2026 from 0.28 percent in Q1.

Its contribution remained below the 1.23 percent recorded in Q2 2025.

The apparent difference between the year-on-year contraction and the improvement from the previous quarter reflects the comparison periods used by the NBS.

Real electricity output increased from N145.31 billion in Q1 2026 to N561.76 billion in Q2, but remained below the N628.61 billion generated in Q2 2025.

The NBS data also show that the weakness was not limited to inflation-adjusted output.

In nominal terms, Electricity, Gas, Steam and Air Conditioning Supply contracted by 0.87 percent year-on-year in Q2 2026, following a 4.98 percent decline in the first quarter.

This compares with nominal growth of 12.94 percent in Q2 2025.

The difference between the nominal and real performances indicates that changes in prices partly cushioned the decline in the current-price value of electricity-sector activity.

The sector’s implicit price deflator increased to 224.98 in Q2 2026 from 202.83 in Q2 2025, according to the NBS tables.

While electricity contracted, another utility-related segment recorded considerably stronger performance.

Water Supply, Sewerage, Waste Management and Remediation grew 11.24 percent in real terms, up from 10.60 percent in Q2 2025 and 10.32 percent in Q1 2026.

Its real output increased from N225.69 billion to N251.07 billion over the one-year period.

The electricity contraction is particularly significant because power supply is an input across manufacturing, telecommunications, trade, construction and other productive sectors.

However, the NBS GDP report does not provide reasons for the contraction, nor does it attribute the decline to electricity generation, transmission, distribution, tariffs, grid performance or any specific power-sector policy.

What the official data establish is that the inflation-adjusted economic output attributable to electricity, gas, steam and air conditioning supply declined by nearly N67 billion year-on-year in the second quarter, making the sector one of the areas of the Nigerian economy that failed to participate in the broader 4.43 percent expansion.