October 5, (THEWILL) – Nigeria’s real Gross Domestic Product (GDP) grew by 4.43 percent year-on-year in the second quarter of 2026, up from 4.23 percent in Q2 2025 and 3.89 percent in Q1 2026.
The growth, however, was accompanied by a sharp contraction in the electricity, gas, steam and air-conditioning supply sector, which declined by 10.63 percent in real terms during the quarter.
The sector’s contraction came despite growth across the major components of the economy. Services expanded by 4.60 percent, agriculture by 4.39 percent, industry by 3.96 percent, while manufacturing grew by 3.24 percent.
The power-sector figures showed that installed capacity remained substantially higher than the electricity actually available to the grid.
Nigeria had 28 grid-connected power plants with combined installed capacity of 13,625 megawatts (MW) during Q2. Average available generation capacity, however, stood at 4,454.17MW, representing a plant availability factor of only 32.69 percent.
This left 9,170.83MW, or 67.31 percent of installed capacity, unavailable on average during the quarter.
Average hourly generation stood at 4,022.40 megawatt-hours per hour (MWh/h), while total generation for the quarter was 8,784.93 gigawatt-hours (GWh).
Compared with Q1, average hourly generation declined by 2.20 percent from 4,112.72MWh/h, while total generation fell by 1.11 percent from 8,883.47GWh.
The generation load factor was 90.31 percent, indicating that most of the capacity available to the grid was utilised. This placed the emphasis of the Q2 shortfall on limited available capacity rather than under-utilisation of plants that were already operational.
The distribution end of the value chain also recorded significant losses.
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DisCos received 6,982.32GWh during the quarter and billed 5,812.31GWh, resulting in energy accounting efficiency of 83.24 percent. Aggregate technical, commercial and collection (ATC&C) losses stood at 36.23 percent.
The figures mean that electricity generated for the grid continued to face substantial losses before reaching the point of final consumption.
For manufacturers, the cost of unreliable electricity has increasingly been reflected in spending on alternative power.
Data from the Manufacturers Association of Nigeria (MAN) showed that manufacturers spent N1.34 trillion on alternative power in 2025, compared with N1.11 trillion in 2024 and N781.68 billion in 2023.
The 2025 figure represents an increase of N230 billion, or about 20.7 percent, from the previous year and N558.32 billion, or 71.4 percent, compared with 2023.
At the same time, average daily electricity supply to manufacturers declined from 16.7 hours in the first half of 2025 to 13.1 hours in the second half, a reduction of 3.6 hours per day.
The rising cost of alternative power adds another layer to production expenses at a time when manufacturers are already contending with elevated input and financing costs.
The broader economic data nevertheless showed continued expansion across key sectors.
Services, the largest contributor to GDP, grew by 4.60 percent in Q2 2026, while agriculture expanded by 4.39 percent. Industry grew by 3.96 percent, with manufacturing recording 3.24 percent growth.
The figures point to an economy expanding faster than the electricity system supporting it. While GDP growth accelerated from 3.89 percent in Q1 to 4.43 percent in Q2, the electricity, gas, steam and air-conditioning supply sector contracted by 10.63 percent.
There was some improvement in power availability later in the year. NERC’s August 2026 operational factsheet showed average available generation capacity at 4,758MW, up from the Q2 average of 4,454.17MW.
Average utilised generation stood at 4,102MW, with an 86 percent load factor.
Despite the improvement, available capacity remained far below the 13,625MW installed capacity recorded in Q2.
For businesses, the gap remains significant. Manufacturers and other electricity-intensive users continue to bridge part of the shortfall through self-generation, while distribution losses further reduce the amount of power reaching final consumers.
The Q2 figures therefore present a clear mismatch: real GDP expanded by 4.43 percent, but the electricity supply sector contracted by 10.63 percent, average available generation was only 32.69 percent of installed capacity, and manufacturers spent N1.34 trillion on alternative power in 2025.
The numbers underscore the infrastructure challenge facing Nigeria’s growth trajectory: economic activity is expanding, but reliable electricity supply remains considerably below the level required to support that expansion efficiently.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
