Q1 2026 GDP report: Sharp power sector contraction, red flag for Nigeria’s economy

The Centre for the Promotion of Private Enterprise (CPPE) has expressed concerns over a sharp contraction in the electricity/gas sector, noting that the development represents a red flag for the economy.

The recent GDP growth outcomes for Q1 2026, released by the National Bureau of Statistics (NBS), identified a sharp contraction of the sector by 15.30 percent, making it the weakest performing sector in the period under review.

The Centre, in a statement by its Chief Executive Officer, Dr. Muda Yusuf, on Thursday, therefore described the sector’s performance, in the quarter, as the steepest contraction ever recorded by the sector in recent years.

It noted that the contraction also underscores the deepening fragility of Nigeria’s power sector, thereby raising serious concerns about the sustainability of economic growth, industrial productivity and business competitiveness.

 “This development is concerning because electricity is not merely another economic sector; it is the foundation upon which productivity, industrialisation, competitiveness and inclusive growth depend.

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“A contraction of this magnitude signals persistent structural weaknesses across generation, transmission and distribution, as well as continuing liquidity and governance challenges within the power sector,” it added.

The centre argued that the implications remain severe for businesses; since firms are already burdened by high interest rates, logistics costs, weak consumer purchasing power and deteriorating electricity supply that continues to escalate production costs and weakens competitiveness.

According to CPPE, heavy dependence on diesel and petrol-powered self-generation has continued to erode profitability across the manufacturing, SME, hospitality, agro-processing and digital sectors.

It called for accelerated reforms in the electricity value chain; since sustainable economic transformation, it argued, cannot be built on fragile energy infrastructure.

Such reforms, it advised, must include stronger investment in transmission infrastructure, improved market liquidity, accelerated metering, reduction in technical and commercial losses, and governance reforms that can restore investor confidence in the sector.